31 March 2017
Although others expressed uncertainty over the immediate future of the prime market, a report on Friday from Douglas & Gordon and D&G Asset Management suggested property values in London’s ‘emerging prime’ areas were 20 per cent cheaper in dollar terms than they were two years ago, following the fall in the value of the pound.
James Evans, CEO of Douglas & Gordon, said, “For two years, the UK residential property market has faced higher bands of stamp duty, a reduction of mortgage interest relief for 40 per cent buy-to-let taxpayers and an additional three per cent stamp duty levied on buyers of second properties.
“The governor of the Bank of England has said that he will not hesitate to take additional measures required to avert a recession by keeping interest rates low for longer. In this deflationary climate the yields on offer from residential property in certain parts of London will become increasingly attractive to investors.”
On overseas investors, Andrew Monteath, from D&G Asset Management, added, “Ever since the build-up to the general election campaign last year, political uncertainty has dogged the UK and slowly weakened sterling against the dollar.
““We think that the ‘in-out’ circus will spread to other countries across Europe over the next two years. Within a short period of time London property, which is now even cheaper in dollar terms after this result, will be viewed as a safe haven by investors.” Mark Posniak, managing director of Dragonfly Property Finance, said, “There will be a huge amount of hypothesising about the fate of the UK property market, but it’s impossible to know the full ramifications of the Leave vote.
“How the Bank of England, the government, the financial markets and economy react today and in the weeks and months ahead will be crucial to how the property market performs.