Prime London Property Market: Resilience Amidst Election Uncertainty
The prime London property market is exhibiting a fascinating mix of trends in 2024. LPF Members Savills reports strong buyer commitment despite the upcoming general election, while Prime Purchase predicts a busy first half fuelled by pre-election jitters. Let's explore these dynamics and analyse what's shaping this high-end market.
Undeterred by Elections: Prime Buyers Show Commitment
A recent Savills survey dispels concerns about the election's impact on prime buyers. A resounding 79% expressed no change in their moving plans, with 13% even reporting a "stronger desire to buy in the next 12 months," according to Savills. This unwavering commitment reflects confidence in the market's long-term prospects.
Shifting Priorities and Evolving Mortgage Preferences
The pandemic's influence on property preferences seems to be fading. Savills highlights a renewed focus on traditional factors like square footage and number of bedrooms, a shift observed by Savills. Interestingly, the survey also reveals a preference for shorter-term, two-year fixed mortgages, potentially driven by an anticipation of further interest rate cuts, as analysts predict.
A Race Against Time: Busy First Half Expected
Experts at Prime Purchase foresee a "front-loaded" market in the first half, fueled by a desire to complete deals before potential policy changes under a new government, as noted by Charlie Wells, Managing Director at Prime Purchase. This pre-election rush suggests some buyers are wary of the unknown. However, the top end of the market is already experiencing a surge, with Guy Meacock, Director and Head of the London team at Prime Purchase, reporting a flurry of high-value transactions.
Overseas Investors Return, Lured by Yield
Adding momentum to the market is the return of overseas investors. London will always be a a hub for international investment and whilst there has been a slight slow down in the Home Counties, international investment in the capital remains strong. With super prime branded residences such as The OWO and The Whiteley showcasing London property at its best, coupled with the city’s relative value on the international stage, the continued influx of foreign capital will continue to boost to market activity.
Navigating a Policy Shift: The Non-Dom Tax Regimes' Impact
The abolishment of the non-domiciled tax regime presents a potential challenge. LPF Members Blick Rothenberg explain that the UK’s non-dom regime has been hugely popular with wealthy overseas individuals and families, attracted by the generous tax breaks. The non-dom regime was the envy of many European countries, and the likes of Italy, Spain and Portugal created their own versions to attract private wealth to their shores. From next year, the archaic concept of domicile will no longer be relevant for determining an individual’s tax status. The move to a new four-year tax free regime, the UK may lose its competitive edge compared with countries such as Italy, who have 10-year tax holidays. Some high-net-worth individuals may relocate elsewhere. However, it might indeed lead others to return "onshore," potentially mitigating the losses.
A Cautiously Optimistic Outlook
With inflation seemingly under control and a potential interest rate cut on the horizon, the overall sentiment leans towards cautious optimism. While the election adds a layer of uncertainty, the underlying strength of demand, particularly in the first half of the year, suggests a period of potential growth for the prime London property market, as evidenced by Savills' survey results which show a "net balance of +32% commitment to move" within the next six months.
Priya Rawal, Founder & CEO of The Luxury Property Forum says:
The prime London property market is sending mixed signals, but here at The Luxury Property Forum, we see reasons for optimism. Savills reports strong buyer commitment, particularly for larger homes that are a mainstay of the luxury market. The return of overseas investors, combined with a potential pre-election surge, creates exciting opportunities for our members. While the abolished non-dom tax regime presents some uncertainty, we'll keep a close eye on its impact and continue providing expert insights to help our luxury property sellers navigate this dynamic market.
FOR MORE INFORMATION ON SAVILLS
To get in touch with Savills, please check their contact details below:
T: 020 7016 3810
33 Margaret Street|
London, W1G 0JD, GB
Visit their website: www.savills.com
FOR MORE INFORMATION ON BLICK ROTHENBERG
To get in touch with Blick Rothenberg, please check their contact details below:
T: 020 7486 0111
16 Great Queen Street, Covent Garden
London, WC2B 5AH
Visit their website: www.blickrothenberg.com
FOR MORE INFORMATION ON PRIME PURCHASE
To get in touch with Prime Purchase, please check their contact details below:
T: 020 7881 2388
E: CWells@prime-purchase.com
Suite 5, 121 Sloane Street
London SW1X 9BW
Visit their website: www.prime-purchase.com
ABOUT THE LUXURY PROPERTY FORUM:
The Luxury Property Forum is the official forum for the luxury property industry, bringing together highly experienced and devoted members handpicked from every discipline. We facilitate the advancement and continuous growth of the luxury property industry, through developing strong business collaborations and cultivating growth opportunities as well as sharing knowledge, experience and contacts. We are more than just a network, but are a forum for the future.