Property is generally considered to be one of the most reliable long term investments and Central London property, in particular, has a long history of being an attractive and resilient investment of particular interest to overseas investors.
The general election result has significantly boosted the levels of activity in the high value Central London property market in the short term, but has not had the same effect on country house sales, which have remained quiet. Despite the election result and the spectre of mansion tax receding, the country house market is still coming to terms with the recent changes in Stamp Duty, which has had a dampening effect on the buoyancy of the £1million plus property market. Equally the sub-£2million Central London market was little boosted by the election result for the same reason.
Buoyancy, however, has not been a problem for the prime Central London market, but the commentators suggested that this would not necessarily translate into noticeable price growth in the short term. The quantity of properties coming to the market since the election has exceeded any increase in actual demand, so this, together with the current political and economic uncertainty internationally, created underlying caution that subdued the immediate possibility of price growth. On the other hand in the ultra-prime price bracket, there has been a substantial demand for high quality properties to meet the clamour for a safe haven for overseas money as political and economic risks elsewhere made London an attractive destination at this level. This enthusiasm, however, is now likely to be dented by the budget changes to the non-dom regime and the inheritance tax treatment of residential properties held in offshore structures, which will both take effect from 2017, and are likely to give overseas buyers pause for thought before purchasing in the UK, and might encourage some to sell up and leave.