In the run-up to the General Election, property experts were advising that there would be a slowdown before the vote, and then once the dust had settled, the London property market would bounce back. It now transpires that this hasn’t been the case and a leading London estate agent has announced that they haven’t experienced the increase in lettings and sales that they believed they would in the wake of the General Election.
Knight Frank states that the annual house price growth of just 2.3% in the previous 12 months up until May 2015 had been the lowest level recorded over the past 5 and a half years. The firm stated that there had been a release in pent-up demand, there had not been a surge in new demand as they expected. The company has revised their opinion and they believe that the impact of the new stamp duty rates, introduced in December, have had a bigger impact. This is said to have had a bigger impact on the high end buyers in the London capital rather than any impact coming from the Conservative Party gaining a majority Government.
Tom Bill is the head of Residential Research in London for Knight Frank and he released a statement, saying; “The stamp duty change came on top of a series of other tax revisions including to capital gains tax and the annual tax on enveloped dwellings. All of which followed an exceptional period of growth during the financial crisis. It underlines how the notion of a sudden return to double digit annual growth or any sense of ‘business as usual’ is unfounded. There has undeniably been a release of pent up demand in recent weeks but while some vendors may expect an ‘election premium’, buyers have not responded in a similar way.”
Uncertainty likely to continue in London property market
Another firm that has spoken out about the London property market in the wake of the General Election is Cluttons. They believe that there are a number of challenges facing the property market in London and that the uncertainty that arose before the general Election isn’t likely to go away anytime soon.
Faisal Durrani is the International Research and Business Development Manager for Cluttons and he said; “The outlook for the London housing market has stabilised, while buyers and vendors have returned to the market following a conspicuous absence of activity. Our outlook for the rest of the year is for increased stability in the market and a return to a more normal state of activity.”
Cluttons believe that there will be a modest level of price growth for houses in central London this year, at a rate of between 2% and 3%. However, they believe that 2016 will welcome an acceleration of 5% growth before the market stabilises at a level of 4% annual growth for 2017 through to 2019.