Home Sales bounce in UK high-end property after Tory win
December 23, 2019
Agents for high-end London property have reported a bounce in multi-million-pound home sales after Boris Johnson’s election victory.
Buying and selling agents said purchasers were committing to buy homes worth up to £50m after the decisive Conservative win provided political clarity. Overseas buyers also want to pre-empt a stamp duty surcharge planned by Mr Johnson’s government.
Robert Bailey, a Chelsea-based buying agent for “super prime” homes, said that a US client was pushing ahead with a £50m home purchase and a Swiss house-hunter with a £20m buy.
“The concern was always [Jeremy] Corbyn’s views and planned changes on higher taxes for the rich, not Brexit. Now that the Conservatives are in with such a large majority, their concerns have disappeared overnight,” he said. He added that Friday, the day after the election, had turned into a “frenzied day of calls”.
Camilla Dell, founder of the buying agency Black Brick, said many of her clients had waited to exchange contracts until after the vote, including one buying a £3.8m newly built apartment in St John’s Wood. She said most of her company’s pipeline of £50m in home purchases would now proceed quickly.
“They all want to get on and exchange, and not just because of potential stamp duty changes. A more confident market will make sellers more bullish on price,” she said.
This is a shot of adrenalin in a market that was comatose
Trevor Abrahmsohn, managing director of Glentree International — which specialises in super-prime north London homes — said an Asian buyer had committed on Friday to buying a £28m home and another purchaser to spending £5m on a property.
“This is a shot of adrenalin in a market that was comatose,” he said.
The high-end market has been slowing since 2014, partly because of changes in stamp duty, but it has faced further pressure from Brexit and political uncertainty since the 2016 referendum.
Roarie Scarisbrick, a partner at the buying agency Property Vision, said: “All but the bravest held off exchanging contracts until the results were in. I even heard of deals going through with a ‘Corbyn clause’ where the contracts could be rescinded if Labour got in . . . Property lawyers who were hoping to cruise quietly into Christmas week are now flat out.”
He cautioned, however, that any high-end post-election bounce may not translate into a broader increase in market activity. “The deterrents which have suppressed the market are still there,” he said.
Henry Pryor, a buying agent, said: “The rush to buy will for the main be down to foreign buyers looking to beat the introduction of the extra 3 per cent [stamp duty surcharge] . . . If you’re spending £60m then you will want to get a wiggle on.”
In November the Conservatives pledged to charge overseas buyers an additional 3 per cent of the purchase price in stamp duty when they buy homes in England. This would add to an existing 3 per cent surcharge for buyers of second and additional homes.
The Tory party estimated 70,000 purchases a year would be affected, but has not set a timeline. Lucian Cook, director of residential research at Savills, said this was “likely to support demand from overseas buyers in the short term as they seek to buy before it is imposed”.
But Mr Cook noted the ongoing economic uncertainty over the nature of the UK’s future trading relationship with the EU. “This could mean that a bounce in demand in the first part of 2020 proves difficult to sustain through the summer months and into the autumn market,” he said.