UK election rejuvenated the real estate market, so has Brexit

UK election rejuvenated the real estate market, so has Brexit
Written by:
Damian Wood
March 11, 2020
  • By the second week of January, real estate activities with the estate agency and property consultants in London hit a 15-year high.
  • Knight Frank said in a report the surge in potential buyers was 92% higher than the same week in 2018, and averagely 95% above the same year.
  • Tentative reports indicate that most experts strongly feel the recession is being reversed, thanks to the returning confidence in the UK market.

Last year’s election triggered a jump in the property market in central London, resulting from newfound certainty in the region’s real estate, Knight Frank said on Monday.

By the second week of last month, real estate activities with the estate agency and property consultants in London hit a 15-year high.

A report by Knight Frank said that the surge in potential buyers was 92% higher than the same week in 2018, and averagely 95% above the same year.

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Knight Frank also recorded a jump in post-election sales. In the ten business days following the Dec. 12 election, the property dealer transacted more deals than any other period in the last three years.

After the landslide victory by Prime Minister Boris Johnson and delivering the Brexit last Friday, the property market is expected to revamp to record levels.

Knight Frank’s report did not state specific numbers regarding sales or potential buyers.

“Although demand has surged in the weeks following the election result, this trend is unlikely to produce any material impact on prices in the near-term,” head of London residential research Tom Bill stated in the report adding that “uncertainty remains in relation to a possible stamp duty hike for overseas buyers as well as continuing Brexit-related ambiguity.”

The 3% stamp duty increase for non-residents as proposed by The Conservancy Party is expected to be debated in the year. Moving forward, Brexit will continue to be streamlined until the end of the year, to provide for a smooth transition.

Meanwhile, just like the elections, the UK real estate has seen a ‘Brexit bounce’ prompting a boom in the markets, especially in the capital. After reporting 15-year record highs, experts believe the market is set to rebound sooner than predicted.

“Unprecedented” levels of interest have been reported, with property dealers forced to stagger client deals and extend waiting lists. The realignments come a few days after exiting the EU, a move that had kept the market in suspense since the 2016 referendum.

Tentative reports indicate that most experts strongly believe the recession is being reversed, thanks to the returning confidence in the UK market.

While increased taxes have been considered by some experts such as the head of residential research for Savills, Lucian Cook as stumbling blocks to the UK’s real estate, the market is primarily expected to look beyond such disincentives and focus more on taking advantage of rising demand.