Following the Conservative’s decisive victory in December’s General Election, London’s prime residential market has leapt into action. The moment the result was announced deals were signed, illustrating the catastrophic impact the recent political situation has been having on the market. Buyers’ recent reticence to sign on the dotted line wasn’t simply down to Brexit; it was a lack of confidence in the UK’s political environment.
Almost immediately, the media started reporting prime residential sales across London. According to the Evening Standard, for example, a Hong Kong businessman bought a £65m penthouse in Belgravia just hours after the election result. But now the market has come to life, what next?
We could expect action to continue for the coming months. Overseas buyers may look to pre-empt any surcharge to stamp duty planned by Boris Johnson’s government. UK purchasers may also want to act before market confidence could push prices higher in the new year. Many industry pundits are predicting a wave of action across the board.
But it’s worth considering how the installation of a solid Conservative government won’t evaporate all the challenges the prime residential market is facing. Once initial excitement has worn off, the market will still be contending a range of hurdles.
Firstly, although it’s now slightly clearer what Brexit could look like and when it will happen, uncertainty will still be present in the coming 12 months about the UK’s future relationships with the rest of the world. Large corporates are still threatening to move their offices overseas, though many have determined to stay.
Secondly, changes to stamp duty continue to hover in the air, though it’s likely the government will make announcements early in the new year. Will this help or hinder the UK’s residential market?
Finally, moves such as Westminster Council’s decision last year to limit the size of new build homes to 150 sq m highlight local authorities’ uncertainty about how to deal with the country’s housing crisis. Will limiting the size of new homes really make a difference to the wider availability of homes for everyone? Or will it simply restrict the vibrant industry of architects, engineers and developers that has grown around the development of such high-quality homes?
Certainly 2020 looks brighter for prime residential property than 2019 has been, but we must be cautious about getting too excited. Whatever announcement the government’s makes, however, there’s no doubt that in buyers’ eyes London will continue to offer some of the highest quality properties in the world.