The Conservatives will be the power party for the next five years, and they’ve even got a fully-fledged majority government. Unsurprisingly, the high-value property industry is chuffed to bits with this outcome.
Here are some thoughts from the sector’s key players:
The property market in London will now go crazy
Becky Fatemi, Managing Director of Rokstone
“Now that the British electorate have voted in another Conservative led government this will bring great reassurance to both the property and financial markets, both of which were very reluctant to see an incoming Labour government. The surge of support for the Conservatives was due to three things: the economy, fear of Scotland and distaste about the Mansion Tax.
“Without a doubt property played a big role in many households decision. Not since 1979 has property played such a key role in a General Election. Households across the country were wary of a Mansion Tax and the Don-Dom abolition threat upset London, especially the City. All of this led to the strong Labour defeat. The Conservatives positioned themselves as the friend of the property industry, Labour positioned themselves as the enemy, the election results speak for themselves what homeowners thought of all of this.
“The property market in London will now go crazy, we will see a flood of new instructions, confidence will return and prices in the capital will rise by 10% over the rest of this year. A £1 million home in Prime Central London, will be worth another £100,000 by the end of this year. We will see a flood of new instructions coming onto the market. At Rokstone 40% of our clients and contacts have had properties they were holding back until the Election results are known, now that a Conservative led administration has been returned the floodgates will open and we will see a new wave of new properties and sales take place in the central London market. Investors will also push the button on new luxury developments, so we will see some exciting new luxury resi projects launched over the next 12 months.”
Prime London property developers will be breathing a sigh of relief; luxury developers had a great deal at stake
Camilla Dell, Managing Partner of Black Brick
“A lot of people have been holding off from making decisions but, overnight, an enormous amount of uncertainty has been removed from the market. We’ve already had deals exchange this morning and we’re now moving forward with a potential £22m transaction. We expect this trend to continue as buyers look to move quickly to avoid potential price rises now confidence has returned and we expect conditions to return to a much more fluid, normal market, particularly in the £2m plus bracket where both buyers and sellers will return.
“This morning a lot of Prime London property developers will be breathing a sigh of relief, luxury developers had a great deal at stake.”
It’ll be back to business as usual, with confidence, by Monday
James Bailey, Chief Executive of Henry & James
“Like a lot of people, I thought we were going to see a hung Parliament. There is no doubt that people have been sitting on the fence, waiting to see what would happen, waiting to see if the threat of Labour’s mansion tax would become a reality.
“And in a single night, all that doubt has been wiped out. How encouraging it is that we are not going to wait for weeks for the dust to settle. What this result sends out is a message to the rest of the world, that Britain is a good place to invest.
“I’ve got one Kuwaiti client, for example, who was holding off on making an offer for a house until he knew the result of the election. Now, on the basis of the vote, he has decided that not only will he buy the property, but he will stay in the UK and educate his family over here (he has four children and another is on the way).
“Considering where we were five years ago, things have improved to such a degree since then. In comparison to much of Europe, Great Britain has been doing extremely well. Before the election, you heard all kinds of stories that banks were going to pull out, but now that cloud has passed.
“The property market remains stable, and people will continue to have confidence in bricks and mortar.
“I should think that on Monday morning, it will be back to business as usual.”
There will be bun fights for the best houses as confidence in the top-end of the regional market returns
Edward Heaton, Heaton and Partners
“As a result of this year’s General Election I expect that prime country house prices could rise by as much as 10% within weeks. There will be bun fights in the next few weeks for the best houses which come to the market as confidence in the top-end of the regional market returns. For many operating in the prime property market, there is a palpable sense of relief at the Election outcome as there were some genuine concerns about the possible impact of Mansion Tax tied in with the attack on non-doms proposed by Labour.”
Humberts expects buyer registrations to increase by at least a further 20% in the second half of 2015
Ian Westerling Managing Director of Humberts
“A Conservative majority is a huge welcome sigh of relief for the Property Industry. Although the market usually takes a few weeks to settle post any General Election we expect hotter than usual Summer transaction levels as vendors who had previously held off are likely to ‘push their buzzers’. The pent up buyer demand means that vendors of quality stock can feel reassured that an increased momentum is likely to be injected into the market over the next few months – as such, Humberts expects buyer registrations to increase by at least a further 20% in the second half of 2015.
“Although increased Stamp Duty remains an issue at the top end, the removal of the Mansion Tax threat is likely to inject some energy especially from foreign purchasers who should feel reassured that UK Prime Property still represents a safe haven for investment.
“The Conservative majority is a sound result for the property industry as a whole, however we urge the party to stick to their promises and push hard to ensure home ownership remains a top priority over the coming five years.”
It is not just wealthier homeowners who should be counting their blessings
Peter Rollings, CEO of Marsh & Parsons
“The most positive aspect of a conclusive election result is that the uncertainty that has surrounded the economy – and the property market – can now be banished and the recovery can continue. A hung parliament may have prolonged this purgatory, so a majority vote means that buyers, sellers and the property industry as a whole can again plan for the future with confidence.
“The top-end market will be breathing a huge sigh of relief that £2m+ properties won’t be penalised by a mansion tax, a levy that would have stifled activity in the capital and across the South East. Any such tax could also have had implications on lower rungs of the property ladder too, so it is not just wealthier homeowners who should be counting their blessings. The post-election feel-good factor could kick in immediately and 2015 may prove to be a reversed version of 2014 in starting slowly and finishing strongly.”
This is the best news the property market in prime central London could have hoped for
Mark Tunstall, Tunstall Property
“This is the best news the property market in prime central London could have hoped for: the prospects of a mansion tax will now significantly diminish, investor confidence will return and this will help to re-start the upper end of the housing market in particular – in prime central London and the wider south-east, where more than 80% of the properties valued at £2 million or more are situated, purchasers’ nervousness ahead of the election proved a significant drag on the sales of more expensive property, which have fallen substantially over the past 12 months.
“As a result there is likely to be a flurry of activity in the next month or two as buyers move on properties that may have been languishing on the market for months. In terms of the rental market, in the short term an increase in sales activity is likely to reduce the supply of the most expensive houses as would-be landlords re-focus their energies on the sales market, putting upward pressure on rents. Over the medium term, provided the threat of a mansion tax doesn’t rear its head again, the overseas investors who have been such a significant force are likely to continue to buy new build stock with confidence. Added to the existing rental supply, this should help to keep rental growth subdued.”
This Conservative win will now unleash a big wave of pent up demand in the London housing market
Gary Hersham, Managing Director of Beauchamp Estates
“This is a welcome result for Great Britain PLC. The end to uncertainly will see activity in the prime central London property market return to previous levels, if not surpass them, as delayed and pent-up activities are given the green light. At the start of this week Beauchamp Estates issued our Election Research Paper saying that we believed that the country was on course for a Conservative led government, and we have been proved correct. Property has played a very influential role in this election, voters want economic stability, the country’s books balanced and their homes safe from a Mansion Tax. All of Labours talk of a Mansion Tax upset Middle England and talk of abolishing Non-Dom status upset London and the City.
“This Conservative win will now unleash a big wave of pent up demand in the London housing market, and will lead to a rise in new instructions and sales across London and the Home Counties in particular, especially in the premium sector of the housing market. Purchasers have been holding back until the results of the election are known, now this is done the market will surge forward again. This has brought the clarity that the property market needs, and this Conservative Party win will reassure purchasers and investors that London remains the place to invest in real estate in the world. The Conservatives have proved that they know how to appeal to homeowners across Britain.”
An unambiguously positive result for the housing market
Charlie Ellingworth, Property Vision
“This election result is an unambiguously positive result for the housing market. The spectre of a mansion tax has haunted the market for the first half of this year and now that threat has gone turnover will certainly pick up. One has to hope that will not cause further crazy upward spirals in prices.
“If the Conservatives have any sense they will spike the Labour guns for the future by reforming the Council Tax bands. It is also to be hoped that they will somehow manage to kick the insane Right to Buy election pledge into the long grass where it deserves to stay.”
The outcome of the election is a highly positive result for the property industry
Giles Hannah, Senior Vice President of Christie’s International Real Estate
“With the David Cameron in power the two property markets we have, the UK market and the prime central London market, will both see positive growth in 2015 and in 2016. For the UK expect 3% price growth and for prime central London 6% price growth by the end of the year. The fact that there will be no mansion tax, no additional taxation on international buyers and no hung parliament, which spooked the market for the last year, is a key factor in the expected price growth. There will now be a property supply issue in the market as buyers compete and this will drive interest in buying property as an asset to invest which in turn will push prices upwards. Expect to see buyers from Canada, USA, Middle East and Asia buying in prime London who will view the market as a safe haven to invest in. The economy in the UK is also expected to grow and the FTSE 100 will rally upwards which will give UK buyers confidence to purchase properties at all price levels. The outcome of the election is a highly positive result for the property industry.”
We are already taking calls from international buyers who want to get back into the market
Michelle van Vuuren, Managing Director of Residential Development at Sotheby’s International Realty UK
“A Conservative victory – whether outright or otherwise – will give the housing market what it wants: stability. 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. 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 over the Summer! We are already taking calls from international buyers who want to get back into the market.”
The whole of Chelsea woke up this morning and breathed a huge sigh of relief
Jake Russell, Director at Russell Simpson
“I predict the whole of Chelsea woke up this morning and breathed a huge sigh of relief. For months uncertainty over the election has rolled on as the threat of a Labour-SNP coalition, Mansion Tax, eradication of the Non-Dom status, which has led to the sales market feeling the pinch. We have a number of ready and willing purchasers waiting on the sidelines for Mr. Cameron to come out of Buckingham Palace this afternoon victorious. Whilst he toasts a new government they will be toasting to a new home, we estimate that not only we have this pent up demand that will soon release and revitalise the property market, but most agents across PCL will see exchanges happening regularly over the next two weeks. A Conservative government will see the London market grow from strength to strength in the coming years, which in turn will fuel continued economic growth.”
I now hope that we can take the political rhetoric off the table and return to a more stable residential property market
Peter Wetherell, Chief Executive of Wetherell
“This Conservative win is excellent news for the London property market. With the mansion tax threat now off the agenda Government should now focus on creating a more equitable Council Tax upper rate bands across the whole of the country. London still has many concerns as reflected by its electorate however this election should mean that London can continue its success in being the No.1 capital in the world with a main commitment to creating more homes. The volume of sales in the prime residential market in central London has dropped by a third over the last two quarters due to threats and uncertainty plus high transactional charges. I now hope that we can take the political rhetoric off the table and return to a more stable residential property market.”
We would not be surprised to see a surge in pent up activity above £1.5m across the UK
Stephanie McMahon, Head of Research at Strutt & Parker
“One of the big questions this morning is how the pollsters could have got it so wrong, as at really no point over the past few weeks has a majority win been predicted. Today, as we woke up with the Conservatives highly likely to take a majority in the polls, the one thing we had anticipated, at least a week of tense negotiation for a coalition parliament, is no longer necessary and the country can move on immediately. The major landslide for the SNP was predicted and will add further weight to the devolution agenda.
“So to the residential property market… The prime central London markets displayed a marked reduction in volumes over the past nine months and this result will likely put an end to that. In addition, the more property tax favourable approach of the Conservatives will serve to immediately increase confidence for those buying and selling homes over £1.5m across the UK and we would not be surprised to see a surge in pent up activity.
“The proposed tax changes were unlikely to have had a significant impact on the majority of the rest of the market, except in the case of the Liberal Democrats if they succeeded in their (up to) 200% council tax levy on second home owners and so we expect transactions to continue in the positive trend we have been seeing for the past two years. All the main parties had house building within their manifestos, which we would welcome, however, with annual supply levels at some of their lowest since the 1980s we question how plausible this supply side reaction is. In the event of low supply, the added Conservative stimulus to the demand side via Help to Buy ISAs and Right to Buy will ultimately result in further pricing pressure on existing stock. The rental market came under scrutiny with Labour intending to legislate for three year tenancies and index-linked rate rises, this issue will now likely be shelved. In any case, the latter is broadly in line with market practice and demand for the former is questionable. It would be interesting to understand if tenants would wish to be tied into three year contracts or prefer the flexibility of short term lets – the January ARLA report stated that average tenancies currently sit at 18 months.”
“This election has been fought around the NHS, immigration and housing – and on the surface there were limited policy objectives aimed at business and commercial property. That said, a Conservative majority will mean that their policies have a greater chance of being enacted and the devil will be in the detail.”
We expect a strong bounce back in activity in the Prime residential markets
Adam Challis, Head of Residential Research at JLL
“These results provide an even stronger Conservative mandate than under the previous parliament. This is good news for the housing market, particularly in London.
“We expect an immediate boost to the Capital, where Labour policy ideas were acting as a drag on activity. Price growth this year should hold at circa 5-6%.
“The real job that begins today is to set out a clear plan to boost new home supply. A stronger housebuilding sector is the only way to solve the UK’s housing crisis, while also adding construction jobs.
“Continuity of housing policy will strengthen the chances that the UK will make strides to solve the housing crisis. This election result is a win for struggling renters, aspirant first-time buyers and even the bank of mum and dad.
“We expect a strong bounce back in activity in the Prime residential markets. More than any other part of the market, Prime London activity has been affected by election in particular tax uncertainty. A decisive result with policy transparency is the best outcome London could have hoped for.”
The clouds that have hung over the London property market have now dispersed
Nick Leeming, Chairman of Jackson-Stops & Staff
“With the Conservatives looking set to win majority, the clouds that have hung over the London property market have now dispersed. Having seen the number of property transactions slow down sharply over the last six months, as the prospect of mansion tax loomed on the horizon, with today’s result, we expect to see greater activity in the London market from now on. High valued properties, whilst still affected by some of the more recent tax changes, should see more stable demand and the resurgence of international interest. Now that London is open for business again we expect the wider markets to respond accordingly.”
Andrew Langton, Chairman, Aylesford International
“Thank goodness common sense has prevailed and David Cameron has been totally vindicated. It would appear the Conservatives will now have a well-deserved majority to run this country without the confines of a coalition government for the next five years – alleluia. We anticipate Sterling will strengthen and UK Ltd will continue to grow with increased employment resulting in an economic recovery which has been a leviathan effort on behalf of George Osborne to date. The London residential market, which has been the target of so much taxation, will now revert back to stability and we predict a massive surge in activity with at least twelve transactions proceeding over the next few days that were holding back pending this result. Our prediction is stability after a year of instability and indecision. The envy taxes planned by Labour of a Mansion tax, the rent cap and the tearing up of non-domicile benefits are hopefully in the bin, and the residential property sector can at last breathe a massive sigh of relief after all the hike in stamp duty, the envelope tax and capital gains tax that has been introduced over the last five years. Singaporean investors should take huge comfort in the Conservative win particularly where they may have invested in residential property and specifically in the buy to let sector. Cameron is committed to a referendum on the EU which many feel has to be reformed particularly on immigration. We are staunch fans of many EU policies but as with an old car, it may now require a complete overhaul and even a new engine BUT it will gradually increase in value following its overhaul and inevitably run more efficiently. This is a memorial day in the English property calendar.”
Britain is open for business and open for a stable and growing property market
Alex Newall, Managing Director, Hanover Private Office
“Britain is open for business and this is good news for the property market. The Conservatives are safeguarding the UK economy and the impact on the property market will be significantly positive.
“Now the political uncertainty has cleared, there will be no Mansion tax, there will be no scheme to ban the non-domicile status. The Conservative plan to increase house building and this will be a positive step for all those who are trying to get a foot on the property ladder, and they will be helped by the lower stamp duty at the affordable end of the housing market. At the higher end of the property market all those house buyers both UK and international, who have held off investing in the UK pending the result of the election will be returning to the market. Uncertainty over taxation has cleared.
“International interest in the UK as a safe place to invest, will continue. London has always been a great place to live, and the sign is firmly above our door – Britain is open for business and open for a stable and growing property market.
“My advice is to investors to move quickly – now is the time to invest into the UK, as there will be a spike in activity and the volume of transactions, and thus tax receipts from stamp duty; it is a win-win. The underlining economics for the UK will be bolstered by the Conservative’s manifesto. I predict five years of growth for the UK property market with sales volumes likely to rebound and values rising. The £5m plus Home Counties market will continue to attract international interest and Prime Central London will see continued demand from international buyers.”
There will be a huge sigh of relief that uncertainty has been lifted from the prime property market in London
Simon Barnes, Simon Barnes Property Consultants
“There will be a huge sigh of relief that uncertainty has been lifted from the prime property market in London now that the Conservatives will form a Government for the next five years. Markets hate uncertainty and the threat of a Mansion Tax, proposals on non-domicile status and changes to property taxes had caused a bottleneck for both buyers and sellers. Now this bottleneck will be released and for the next few months we are likely to see a growth in sales and increased prices before the market settles down to steady growth, hopefully for several years.
“Biting the hand that feeds you has never been a good idea. Over the last nine months, the threat of further taxing rich investors and property owners risked cutting off a huge supply chain in London. Regeneration projects, new building and associated infrastructure all require the confidence of businesses, investors and developers. The election outcome will provide that confidence, ensuring that London continues to thrive and grow.”
Thank goodness the whole charade is over
Jeremy McGivern, Founder of Mercury Homesearch
“There has been nothing sane about this election, which holds pretty true for most elections nowadays. Soundbites and populist rants seem to be the modus operandi of every party – some worse than others. Thank goodness the whole charade is over. It was just one massive storm in a teacup. But what will be the likely effect on property prices? Well shares in Foxtons seem to be rebounding strongly which gives you a fairly good idea.
“The number of house transactions in RBK&C and Westminster had plummeted by 50%, so it is highly likely that many of those buyers who had been sitting on their hands will now be motivated. Of course, there has also been a lack of properties coming to the market, so you can also expect more choice in the coming months.
“Quite simply, life will go on and with the uncertainty of the election removed and interest rates at historic lows (which are somehow still going lower. Negative interest rates – who would have believed it?), property and indeed asset prices in general will likely continue higher.
“However, it would not surprise me if some buyers, predominantly investors, decide to focus on properties closer to £1m and below, i.e. buying two properties at £1m rather than one at £2m. The drama of a potential Mansion Tax is still fresh in the mind (although I believe those fears were massively overblown). So some investors may take the view that it could rear its ugly head again at the next election.”
Bringing more of the same is clearly seen as a positive, but there are still some tough decisions
Martin Bikhit, Managing Director at Kay & Co
“The threat of Mansion tax, removal of non-dom status, three year rent freeze were policies that clearly didn’t resonate with the voters. An over regulated banking sector and increases in taxes for higher earners would have been bad for Britain as business and investors looked for a more favourable environment to do business.
“The Conservatives are a known quantity and a further five years, bringing more of the same is clearly seen as a positive. The voters think so and the money markets appear to agree. There are still tough decisions that could have an impact on business, the main one being an in/out referendum on membership of the EU. Not having free trade with our European neighbours is unthinkable and there will still be jitters over the threat this could cause.
“Since we first opened our doors, Kay & Co have witnessed seven general elections and watched six prime ministers come and go. We also know that London will continue to thrive. It’s our capital, the home of Monarchy, Government, Law and Finance. Global businesses will continue to be based here. London will continue as a centre of fashion, food, culture and commerce, making it a vibrant place for people to live.”
Fantastic news for mews
Marlon Lloyd Malcolm, Sales Manager, Lurot Brand
“This is fantastic news for mews! Lurot Brand, who have for the last three weeks been on more valuations than the previous two months, have been doing so only to help vendors know how to prepare for today’s decision. Last night’s win for the Conservatives has led not only to a surge in buyer leads from the major property portals, but should push those vendors off the fence. This is a great result for Prime Central London and whatever is going to happen it would be fair to say that the property market in Central London will regain the confidence it has lacked for the last 12 months.”
We expect there to be greater activity in the housing market, especially in the £2m+ markets
Alison Platt, Chief Executive Officer, Countrywide plc
“Now we have clarity following the General Election, we expect there to be greater activity in the housing market, especially in the £2m+ markets facing the prospect of a Mansion Tax.
“We anticipate this Conservative led Government to turn its attention from implementing policies that stimulated demand in the housing market to addressing the lack of housing supply. Sticking to its pledge to boost housebuilding through the provision of more affordable housing and more garden cities should prove welcome.
“The new Government could take this a step further by reviewing precisely what we call Greenbelt today and look to free up more land for sustainable development, as outlined in our ‘Tonic for Tomorrow’ research paper.”
It is now time to reignite the property market, return to business as normal and restore confidence in UK PLC
Lucy Morton, Director and Head of Agency at W.A.Ellis
“A Conservative victory is a good result for the housing market, particularly in London, and we have noticed an immediate change in sentiment from both vendors and purchasers. As we opened for business this morning, two properties exchanged contracts and renewed confidence was further endorsed by the strengthening of the pound and the FTSE.
“We anticipate this renewed confidence in the property market will increase and give a much needed boost after months of uncertainty and the threat of Labour policies including rent controls and Mansion Tax.
“The Conservatives will continue with their commitment to solve the housing crisis and create more homes. They have targeted to create 200,000 new starter homes within the next Parliament. We believe they will also review the Council Tax rates and create a more equitable banding.
“The lettings market has been affected by the political uncertainty and we believe that enquiry levels will pick up as confidence in our economy resumes and firms employ both locally and from abroad. The buy to let investor no longer has the looming threat of rent controls which will encourage the investor and thus boost supply throughout the country.
“It is now time to reignite the property market, return to business as normal and restore confidence in UK PLC.”
Inevitably going to result in a spike in the market at all price levels
Mark Pollack, Director, Aston Chase
“This is a great outcome for the property market across the UK. The Conservative victory would seem to reflect a delayed reaction from the electorate to the former banking crisis and financial meltdown presided over by Labour.
“Needless to say, with the immediate threat of Mansion tax removed and non-domiciles no longer ‘targeted’ this is inevitably going to result in a spike in the market at all price levels and particularly for the prime/super prime markets which have suffered over the last twelve months or so while international buyers sat on their hands awaiting the outcome of the General Election.
“I anticipate a surge in demand resulting in increased transactions and the potential for further 5-10% capital growth over the next 12 months.”
This should bring back some confidence into the £2m plus markets
Lee Cash, Managing Director, Oakhill Residential
“So It looks to be that the Conservative party have won a small majority. Sales are typically subdued in the run up to the election as we’ve seen, but with this outcome, it’s likely we should now see an increase in activity in the housing market over the next few months. We may also see the bounce from the December SDLT cuts start to feed through into the market. Certainly any worries of the housing market being dragged down by a second election can be put aside. Many potential sellers will be relieved that the Mansion tax is off the table and with the signs of stability for the next five years being in the air, this should bring back some confidence into the £2m plus markets, stimulating activity across the prime central London market and the rest of the UK.”
The prime country market will be the one to watch
Mark Parkinson, Director, Middleton Advisors
“Few in our industry were admitting it, but many people were holding off making a decision until there was a clear decision. All the industry chat this week has been about a government being formed at some distant point in the future and what impact that delay would have on what should be the busiest time of the year in the prime residential market across the UK. No-one was prepared for a Conservative majority, it seemed pointless to even think about it until about 1am this morning.
“There is so much pent up demand that we expect the London market to re-ignite, the issue will probably continue to be lack of quality supply. The prime country market will be the one to watch, even with modest rises in property taxation we will see a surge of activity and a 10% rise in prices this year.
Demand for exceptional country houses will be fuelled by this result
Tom Hudson, Director, Middleton Advisors
“The demand for exceptional country houses will be fuelled by this result. Supply will lift without question, so expect to see some strong prices achieved. The early bird catches the worm.”
Will unleash a pent up multi-million pound wave of foreign investment into the Prime London residential property market
Vic Chhabria, Director of Rescorp Residential
“A Conservative majority win is the best result that we could have hoped for as a nation. It now means that after a very long time, the government can focus on getting the UK back on track in every respect. The Tory Policies will solidify and cement the business community resulting in actually bringing in more investment into the country and will build a stronger and more competitive economy. As far as the property market in prime central London, this result could not be more welcoming and will bring a much needed clarity to the London housing market. It is the exact catalyst that was needed to ensure an influx of further investment into the city and will unleash a pent up multi-million pound wave of foreign investment into the Prime London residential property market, the positive results of which will be felt countrywide. I have personally spoken to three property investors who were holding off their purchases and are now thrilled with this morning’s result so are forging ahead with their multi-million pound acquisitions. The essence of this election has also lead to a sudden influx of telephone calls into our office for viewings of properties we have on the market. Furthermore, we have taken on two new instructions literally within the first working hour of the morning with vendors now feeling more comfortable to put their properties on the market expecting to be well received by buyers. The result is a testament to show just how much the prime central London market needed the right government to come into power. My own personal prediction is that the property market will now enter a bull run and will continue to rally for the next few years!”
Today’s election result lifts the fog of uncertainly from London’s property market
Rory Penn & Thomas van Straubenzee of VanHan
“Prospective buyers will take significant confidence from the election result, and we now predict an increase in sentiment, activity and potentially pricing in London’s high end property market.
“The recent political uncertainty has led to a ‘wait and see’ attitude from our international clients but London is now firmly back on the map for these UHNW buyers
“Today’s election result lifts the fog of uncertainly from London’s property market and we now expect significant buying activity from our international clients.
“We’ve numerous clients who have been cautiously looking at properties north of £5m, but the threat of wealth and mansion taxes has stopped them buying. This election result removes these threats and provides London’s property market with certainty and stability – we now expect significant buying activity throughout 2015 and beyond.”
Improvements in the London market are likely to be sufficient to trigger a renewed ripple effect into the markets beyond the capital
Savills’ official line on the impact of a Conservative win on the prime residential property market
“With an effective Conservative majority, or Conservative-led coalition now looking like the most likely result, we expect much of the deferred demand from the pre-election period to flow back into the prime market over the remainder of 2015 and 2016, particularly given that the spectre of a mansion tax is now removed from the market.
“On the supply side, it will still take some time for the high levels of available stock that have built during a long period of pre-election caution to be absorbed and we expect that would-be sellers who had adopted a “wait and see” approach pre election will now bring more stock to the market.
“And in terms of potential price growth, restored market confidence needs to be considered in light of where we were in the cycle prior to the period of pre-election uncertainty. Prime London markets were looking much more fully priced than those in and beyond the commuter zone, and will have to operate in a relatively high tax environment given stamp duty increases imposed in December 2014. 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.
“Savills five year prime market forecasts are for steady growth totalling +22.7% in prime London and +23.9% across the prime regions.”
Savills on the mainstream market
“We expect the mainstream housing markets to pick up a little momentum over the short term, simply because of greater certainty over the political landscape and economic policy.
“That is likely to result in an uptick in new buyer enquires and transaction levels generally. But constraints on house price growth remain, most notably the ongoing impact of mortgage market regulation and the prospect that interest rates will rise over the medium term.
“Given where London prices sit relative to the rest of the country we would expect the biggest growth to be outside of the capital, with the strongest medium term prospects in the remainder of the south of the country given the expected pattern of economic growth.
“Political certainty is also likely to prevent a dip in housebuilding, as planning policies put in place prior to the election gain further traction. However there remains a pressing need for substantially increased new build supply and a far more co-ordinated long term housing strategy for the UK.
“Notably, while we have seen a raft of policy announcements that aim to revive the dream of homeownership, they are unlikely to reverse the pattern of falling levels of mortgaged home ownership and increased levels of private renting.
“Savills five year mainstream forecasts are +19.3% as a UK average and +10.4% in London.”
Expectations that prices will jump as a direct result of the general election may be unrealistic
Tom Bill, Head of London Residential Research at Knight Frank
“Following the Conservative Party general election victory, several short-term outcomes are likely in the prime London residential market.
“First, a number of transactions that had been put on hold pending the outcome of the vote will proceed as the risk of further property taxation appears to be less of an immediate threat. Others will progress simply because the election is over and a wider sense of political uncertainty has reduced.
“This ‘unblocking’ of the market is likely to be accompanied by a hardening of expectations on the part of vendors in relation to asking prices. Political risk has faded and some will expect prices to rise as a direct result.
“In the short-term, however, the impact on pricing is likely to be less marked than some expect.
“The first reason is the quantity of properties likely to come onto the market. Many vendors have lined up sales for Monday 11 May, irrespective of the outcome of the election.
“The second reason is that the increase in supply is likely to exceed any immediate uptick in demand.
“Activity in the prime London market has dampened in recent months as buyers and sellers factor in political risks but also as they digest measures like the increase in stamp duty. The market is still in the final stages of absorbing these changes, meaning some buyers may still delay before acting.
“Furthermore, some prospective buyers will have signed rental contracts as they hedged their bets on the outcome of the election, meaning they are unable to act for several more months. All of which suggests a short delay before a supply/demand equilibrium returns to the market.
“As a result, there is likely to be an ‘expectation gap’ between asking prices and prices that new and newly-active buyers are prepared to pay. Expectations that prices will jump as a direct result of the general election may be unrealistic.
“However, price growth is likely to return more quickly to markets that have underperformed the prime central London average, including areas in the borough of Kensington & Chelsea where there has been low single-digit annual growth in recent years.
“Additionally, stronger growth is likely in areas where high-quality properties come onto the market post-election, particularly where stock levels have been low in recent months.
“Knight Frank forecasts zero growth in 2015 in prime central London and 3% in prime outer London, figures that will be reassessed in June.”
No one really expected this
Dominic Agace, Chief Executive Officer of Winkworth
“No one really expected this. We are especially pleased that the prospect of an increased mansion tax under Labour has been avoided, as well as the idea of increased rent controls and obligatory three-year tenancies. All of which would have put pressure on the private rented sector, and served to put off investors.
“What people don’t take into account is the fact that overseas investors are extremely important both to the property market and to the economy. They spend a huge amount of cash in buying UK services.
“Now that the election is out of the way, though, I do think the Tories need to ensure that more houses get built. I would like to see them making moves to get homes built on brownfield sites that they have identified.
“There are a lot of people out there who were just waiting for the election result. Now that the result is known, they will be putting their house on the market.”
We are pleased to have the result so quickly
Jennet Siebrits, Head of Residential Research at CBRE
“Given this was the closest fought election for over 20 years and most difficult to call, we are pleased to have the result so quickly, thereby avoiding any additional uncertainty. The Conservatives acknowledged the importance of house building in their 2015 manifesto, and we look forward to working towards a coherent housing strategy which aims to directly address the ongoing supply and demand imbalance across the UK.
“The Help to Buy scheme has had a significant positive impact as it has boosted transactions throughout the regions, and we are pleased that this will continue following this result. We are encouraged that the increasing uncertainty around the proposed Mansion Tax policy can now finally be removed, helping to increase activity across the top-end of the market.”
We expect to see a surge in activity over the next few weeks as confidence returns to both the sales and lettings markets
Lee Watts, Managing Director at KFH
“The result of the General Election is extremely positive, both for the management of our country and also the property market. The Tory majority win removes the uncertainty of differing party policies that would have continued had the outcome been a hung parliament. We expect to see a surge in activity over the next few weeks as confidence returns to both the sales and lettings markets.”
Many of our clients will be breathing a large sigh of relief this morning
Carol Pawsey, Group Lettings Director at KFH
“The outcome of the 2015 General Election is positive news for both investors and tenants as we put an end to the Labour proposals which would have seen the introduction of three year tenancies, a cap on rental value increases and the removal of fees for tenants. The rental sector at present is largely self-regulating with rents often capped by wage increases, so making changes to these aspects would have had a detrimental effect on both supply and demand. Many of our clients will be breathing a large sigh of relief this morning and the property market has already reacted with positivity and we’ve seen a surge in value of both the Pound and the FTSE, with many property firms seeing a spike in their share price as a vote of confidence.”
A ten year residential investor window is now open as Labour will have to swing back to the centre
Ed Mead, Executive Director at Douglas & Gordon
“In the short term (next 12 months), following a 12 month period where policy-risk has subdued this part of the market, we expect residential assets above £2m to rally by up to 20%. But equally we think this result is very bullish in the medium / long term too. Over the next five years we think that capital values in the Prime London residential markets could double. This election result will force Labour to confront existential questions about its future and we think it will have to re-position itself as a more “new Labour”, more pro-market party. Any likely federal settlement that is offered to Scotland and Wales by Cameron will force the Labour Party to work to attract English votes and this will require them to move towards a more market-friendly position.
“Crucially we think that there is likely to be a ten 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. 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 ten year horizon. London is likely to be the main beneficiary of these inward investment flows.
“Accordingly we expect the following over the short and long term:
- immediate second half 2015 rally in all London real estate residential assets
- £2m+ market, especially in Prime, to rise 20% over the next 12 months and to double within five years
- immediate threat of Mansion tax lifted but very possible that some sort of “Commission“ is set up to look into residential taxation (from which we think higher Council tax bands would emerge)
- imminent significant inward investment into Prime London residential assets from parts of the world where major geo political uncertainty prevails
- lower Gilt yields and sterling
- very modest rental rises as wage-inflation stays low and the sales market heats up
- UK based Banks to be taxed less heavily than they feared (with RBS and Lloyds to be privatised soon) and to start to increase mortgage lending
- This result (particularly the UKIP share of the vote) will help Cameron in his negotiations with the EU over reform before a 2017 referendum
- We do not expect the prospect of this referendum to be a major dampener on asset values and on any price weakness/dips for would be buyers
- No major house-building initiatives leading to the demand–supply imbalance remaining”