The decisive result in yesterday’s General Election has delivered a working Conservative majority, lifting the spectre of a Mansion Tax and major changes to private renting that had seen the London market almost grind to a halt. Leading London estate agent Chestertons now predicts both sales and lettings will once again explode into life, with sales of higher value properties set to soar and landlords and tenants regaining confidence after months of uncertainty.
With David Cameron returning to Downing St with a slender overall majority after a better-than-predicted performance and catastrophic losses for Ed Miliband and Nick Clegg’s parties, the property industry has issued a collective sigh of relief that the proposed new levy on higher-value homes and swingeing reforms to the rental market including direct rent caps will now be shelved.
Robert Bartlett, Group CEO of Chestertons, the leading London estate agency, says: “No one predicted such a clear-cut result, and with some form of coalition looking the most likely outcome before the country went to the polls, trying to predict which policies would be implemented was proving beyond political pundits and property market commentators alike, so homeowners and landlords can be forgiven for feeling in the dark as to which way to jump.
“Labour and Lib-Dems both backed the introduction of a Mansion Tax on homes worth more than £2 million, which would have disproportionally penalised Londoners, especially those with outstanding mortgages or those in retirement who had prudently invested in property as a nest egg. As a result, many people were holding their breath and waiting before making a decision to buy or sell.
“Likewise, Labour’s proposed new laws for the private rented sector would have seen compulsory registration schemes, direct rent controls, fixed-term tenancies and added overheads for private landlords shortening the supply of decent rented homes and ultimately pushing up rents.
“With these proposals off the table, and the spectre of political uncertainty finally lifted, we can now all move on. We are already predicting the next few weeks and months will be very busy indeed.
“There are still issues to be addressed in the property sector in London, not least the need to boost housing supply, make the rental market more transparent and accessible, and unlocking opportunities for regeneration through a joined-up approach to planning and infrastructure delivery. We hope the new Government will continue to work with the property sector and consult properly on proposed changes so together we ensure that any new policies will work as they are intended and can help deliver the long-term sustainable growth and sensible innovations that our industry requires.”
Robert Haigh, Chestertons’ Director of Professional Services, adds: “I think it is an excellent result for the stability of the market. People can now move forward and look to the future with certainty." From a London point of view I think it means foreign investment and relocation to the city will now continue unabated due to the fact that the proposed abolition of non-dom status is no longer a threat.”
Cory Askew, Area Director at Chestertons, comments: “The Canary Wharf market didn't really skip a beat in the build up to the election, but the clear-cut result will certainly settle a lot of nerves in the big banks and that will certainly bring a thaw to recruitment freezes and in turn drive demand for buyers and tenants in the local market."
Richard Davies, Chestertons’ Head of Residential, concludes: “The prime residential markets in London will certainly welcome the clarity this result brings. Many clients in higher-value properties will have been making contingencies for a Mansion Tax coming in, while landlords will also have been scratching their heads at the raft of changes Labour would have implemented. Now the fog of uncertainty has lifted and the way ahead is clear; home-owners and landlords alike can look forward to sustained growth and dynamism returning to the market."