Labour's Loss Triggers Massive Surge in London's Luxury Realty Sales

London's market for luxury properties which was in the grip of a slowdown since the second half of 2014, has bounced back since the recent elections with buyers and investors vying for a slew of exclusive properties in prime locations. Luxury real estate in London is definitely looking promising now.

In the hours after it became clear that the Conservatives had won a majority government at UK's general election in May this year, London estate agents reported a surge in luxury property sales as buyers' fears over Labour's proposed mansion tax were put to rest.

In what can only be described as the height of jubilation, over £ 100 mn worth of high-end luxury property in central London was sold on a single Friday, as harried estate agents were forced to work through the night (and much of the weekend) to service the deluge of inquiries from some of London's wealthiest investors and buyers.

In the week subsequent to the general elections, an estimated £1 bn of luxury property is estimated to have found new owners or been hotly debated among serious buyers, signaling a revived interest in the city's flagging realty market that was dreading a return of the Labour government at the helm of affairs in the country.

According to leading realty analysts this change of guard has opened the floodgates to inquiries from property buyers and investors from across the world, who view London as the number one location to invest and live in, but were concerned with the political outcome of the polls.

After enjoying a golden decade of growth (except for the 2008 global financial meltdown), UK's market for luxury realty finally showed sure signs of a slowdown in the second-half of last year, triggered mainly by the uncertainty over the election outcome.

The impact was almost immediate with many sellers preferring to take their homes of the market until after the poll results and larger townhouses and penthouses opting for the rental route instead of an outright sale. Others were not so lucky.

According to some estimates, nearly 40 percent of London's larger luxury properties that were on the block (penthouses, mansions and apartments) in the first quarter of this year did find buyers, but for way below their asking price.

All that changed almost overnight, when the results of the exit poll were announced late on May 07 this year. The realty market again turned on its head. Phones started ringing off the hook with wealthy buyers coaxing their agents to seal deals post haste, to avoid the inevitable hike in property prices once the election results were announced.

The top gainers in the aftermath of the elections include realtors like Peter Wetherell, the MD of Wetherells, the central London specialist which is said to have processed deals valued at approx £30 m in the 24 hours after the elections and Becky Fatemi, founder, Rokstone Properties in Marylebone, which has notched numbers to the tune of approx £65 mn since the election, which include a £20 mn penthouse in Belgravia and a £2.2 mn flat in Duke Street in Mayfair.

It's now well over a month since the poll results were announced, but London's market for luxury properties continues to make merry. Already realtors are predicting a return to the glory days of yore.

“The results have just been fantastic. Property deals in central London are already up and are likely to return to previous levels if not surpass them altogether,” says one such leading property consultant who has just finalised the sale of a £25 mn prime London home that was finding no buyers prior to the elections.

And it's not just the realty agents who have the smiles back on their face. Bankers, financiers and other professionals with high disposable incomes are also expected to benefit from the election results. Keeping this in mind, Redrow, a leading developer, has launched a spankingly new penthouse project - One Commercial Street - with prices starting from approx £ 2.75 mn onwards.

Taking the cue, The Mellier - a Mayfair automobile showroom-turned-luxury apartment complex is selling what they claim to be the largest new apartments in the city, with price tags ranging from £18 mn to £30 mn.
  
Elsewhere Residence One, a leading luxury residential developer has witnessed a renewed interest from well-heeled buyers for its new project - a 6 BHK, Grade-II listed Belgravia townhouse valued at £ 14.25 mn - that was taken off the market due to a muted response from buyers prior to the elections.

This new wave of optimism that is sweeping London's luxury realty market has witnessed buyers from across the world including Lebanon and Saudi Arabia, converging on the city's upmarket properties. On the flip side, this sudden interest has also sparked fears of an artificial price increase in London's prime properties putting them further out of reach of all but the super-rich.

While it remains to be seen whether these fears do come to pass, for the moment for most of UKs realty industry it's time to forget the travails of the past and celebrate former Prime Minister David Cameron's much-awaited return to 10 Downing Street.