13 May Britain enters a new ‘golden’ age of luxury home sales
One agent describes it as a “golden deals day”. Another says his mobile phone lit up like a Christmas tree as the results started coming in.
As far as the high-end property industry is concerned, last week’s General Election produced the sweetest possible outcome, reviving a flagging market and unleashing a sudden torrent of deals.
In the UK, almost £1bn of luxury property has changed hands or been the subject of “serious offers” in the past seven days – and that’s just the deals the agents – usually a discreet crowd – are talking about.
Giles Hannah, head of residential at Christie’s International, said: “Ultra high networth families from around the world were waiting for the election and very concerned by the political outcome.
“Now they see London as the number one spot in the world to invest and live in. Just a few hours after the result had become obvious I was flooded with enquiries to buy here.”
Elsewhere in the country, the trade in £1m-plus houses took off, driven as much by sentiment the lifting of the threat of a mansion tax.
The 2014 luxury market lull
After a decade of rapid price growth – punctuated by a brief dip during the financial crisis of 2008 – the luxury property market finally slowed in the second half of 2014, thanks in part to the uncertainty surrounding the election.
Vendors took their homes off the market until after the vote and many family townhouses and penthouse apartments were rented instead of sold.
Buyers carried on window shopping but refused to commit, worried that a Labour-led government would limpose an annual mansion tax on homes worth more than £2m.
Only last week a report from Lonres – the London property research company – found that nearly 40pc of townhouses, apartments and mansions on the market in the affluent core of the capital were sold below their advertised price in the first three months of this year.
Luxury sales in London, one of the leading global cities, dropped 1pc in 2014 according to a report by the property group and auctioneers, Christie’s, and those increasingly desperate vendors committed to selling, started to slash their prices, right up to election night.
The post-election luxury splurge
However, at 10pm on May 7, as the polling stations closed and the result of the exit poll was announced, the market was turned on its head as wealthy property buyers got on the phone to their agents and solicitors, trying to force through deals to avoid the inevitable post-election spike in prices.
It was the second spike in luxury sales in six months – both the result of goings-on at Westminster.
George Osborne’s overhaul of stamp duty in December sparked a surge in sales as buyers tried to force through sales to avoid high fees on property worth more than £937,000
The industry is expecting the boost the election boost to last rather longer.
As recent research from Hamptons International has shown, any general election will bring about a 15 per cent rise in transactions across the entire housing market, but this time the impact on the high-end market will be much greater, said Peter Wetherell, managing director of Wetherell.
“This will go down as luxury residential history as another golden deals day for agents across the best addresses in the capital and home counties.”