How London property prices are already being affected by a Conservative victory
Ever since the election there has been talk of a ‘Boris Bounce’ when it comes to house prices. However, although positive movement was much hoped for prior to the Conservative victory in December has the result actually translated to improvements in reality? And what can we hope for in 2020 in terms of increases in house price growth?
The impact on the London property market
There is no doubt that the Conservative victory in the December election had a positive impact on London where property is concerned. Evidence of this arose in a number of different ways:
Deals that had been delayed were pushed through
Almost before the election results were confirmed some deals that had been delayed due to uncertainty about the next government were completed. These included transactions of many different sizes – for example, a six-bedroom Belgravia penthouse was sold for £65 million to a Hong Kong businessman in the hours after the election results were confirmed.
A property rush before Christmas
Many agents identified a sudden increase in interest in property from buyers in the hours and days after the election. This was in sharp contrast to the three years of flat lining activity that preceded it. According to many it was the security of such a decisive election result that gave people the confidence to push ahead. In fact, a rush was anticipated as buyers who had hesitated prior to the election now wanted to complete quickly to avoid losing negotiated deals.
Development projects moving ahead
Developers, too, had experienced pre-election uncertainty and as a result many projects that could have been in the development pipeline were mothballed before the election. After the result, many developers indicated that they now felt able to move ahead with construction. For example, investment company Ganco Assets said it had given the green light to two small sites in Croydon as a result of the election outcome. JR Capital said it had a fund of £75 million of capital for multi-let industrial property that had been stagnating since the summer but which would now be put to into use for 2020.
What do the forecasts look like for 2020?
Across the UK as a whole, despite the predicted Boris Bounce and the initial rush of London closings immediately post-election, most forecasters are being cautious. According to the Halifax, house price growth will remain subdued next year at between 1% and 3%. The Royal Institution of Chartered Surveyors said that in 2020 transaction levels would be fairly flat. It predicted price increases of around 2%, which was a figure also supported by the property website Rightmove. Rents are still expected to rise at a faster rate than house prices next year.
The Conservative victory in the December election – and the clear and decisive nature of it – has given much needed confidence to the property industry. However, it remains to be seen whether this will have a wider impact on the housing market as a whole.
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