British election result offers buyers stability
Overseas investors and owners of residential property in London look set to benefit as Conservatives will likely shelve proposed "envy taxes"
Thank goodness common sense has prevailed and David Cameron has been totally vindicated.
The Conservative Party will now have a well-deserved majority to run Britain - without the confines of a coalition government for the next five years. The final result of a Conservative majority should come as a huge relief to both overseas buyers and, more generally, owners of London residential property.
The main reasons are:
- No mansion tax as proposed by both the coalition and the Labour Party;
- Five years of a Conservative majority government without interference from the coalition;
- The possibility of a reduction in stamp duty;
- No price cap on rental properties; and
- No threat of the non-dom tax benefit being removed.
We anticipate that the pound will strengthen and Britain will continue to grow with increased employment, resulting in an economic recovery thanks to the efforts of Chancellor of the Exchequer George Osborne.
The London residential market, which has been the target of so much taxation, will now revert to stability and we predict a massive surge in activity.
At Aylesford alone, we have at least 12 transactions proceeding over the next few days that were being held back pending this result. Our prediction is stability after a year of instability and indecision.
The "envy taxes" planned by Labour of a mansion tax, the rent cap and the tearing up of non-domicile benefits will hopefully now be discarded. The British residential property sector can at last breathe a sigh of relief after all the increases in stamp duty, the envelope tax and capital gains tax that have been introduced over the past five years.
Asian investors should take huge comfort in the Conservative win - particularly those who have invested in residential property and, even more specifically, in the buy-to-let sector.
Cameron is committed to a referendum on the European Union, which many feel has to be reformed - particularly on immigration. We are staunch fans of many EU policies but as with an old car, it may now require a complete overhaul, but it will gradually increase in value following its overhaul and inevitably run more efficiently.
As for the outlook for the British property market, we expect the entire residential sector will gradually benefit from the election results. All aspects of the market will prosper.
I anticipate a degree of confidence will stabilise property prices after a year of indecision, for the reasons given above. However, this is presupposing there is no further taxation on the British residential market.
The recent capital gains tax to apply to those not resident in Britain holding residential property on gains attributable to periods of ownership from April 6 this year will likely remain in place. However, this has not had a noticeable impact on values nor do we expect it to.
We anticipate much more clarity once the market has managed to assess the impact of this election result on residential property.
Andrew Langton is the chairman of British property agent Aylesford International