The result of last week’s election came as unwelcome news to some, but on the bright side, the UK property market’s prospects couldn’t be better. While Rentify CEO George Spencer wrote recently that investor uncertainty wasn’t actually backed up by any real evidence, market activity was always going to halt prior to the election.
Any would-be landlords who were reluctant to invest in a buy-to-let property in case Labour won and introduced rent controls are now free to make an uncapped living in the private rental sector. Prime Central London in particular has seen an influx of international investment in the aftermath of the Conservative victory, as fears of a potential mansion tax evaporate.
“The removal of the uncertainty that has clouded the last year of the coalition will allow developers to plan confidently for the medium term with a consistent economic policy,” says property development expert Michelle van Vuuren. “Having said that, we do hope to see the Tories come good on their annual pledge of 200,000 new homes and freeing up brownfield sites for development… Increasing the supply of homes is the only way to truly overcome the hurdles that the housing market places for the majority of buyers. At the top end, for the next five years at least, a cessation of the clamour for a mansion tax will see a number of transactions that have stalled to come back on line as certitude creeps back into the market. It is going to be an exciting time to be in the London market.”
“Crucially we think there is likely to be a 10-year cross party consensus – as there was between 1997-2008 – that seeks to encourage wealth creation, foreign inward investment, tight public spending and lower taxes,” says Ed Mead of Douglas & Gordon. “This will keep UK monetary policy loose and be a big green light for overseas investors to choose the UK in general, and UK real estate assets in particular , and to be able to do so with a 10-year horizon.”
It’s not just investors in the capital who stand to benefit, says Lucian Cook, head of residential research at Savills: “It is in prime markets outside London where we expect to see the greatest value increase… Improvements in the London market are likely to be sufficient to trigger a renewed ripple effect into the markets beyond the capital, as those relocating from London find it easier to sell their existing home and take advantage of the price differentials with the rest of the country.”
All of which is to say