The recent Labour victory has sparked a wave of optimism amongst London’s property investors, with analysts predicting a strong rebound in the prime property market.

Pent-Up Demand and Interest Rate Cuts

Experts believe that the election results have cleared the air, prompting a surge in buying activity, City AM reports.

“A lot of buyers were waiting on the sidelines due to high interest rates and uncertainty,” explained Mark Pollack, co-founding director of Aston Chase, a high-end North London estate agent. “This pent-up demand will help stabilise the market.”

Pollack anticipates even further market growth if interest rates fall and stamp duty is abolished, despite Labour’s pledge to increase stamp duty for foreign buyers by one per cent.

A New Era for London Property

Jeremy Gee, managing director of Beauchamp Estates, echoed Pollack’s sentiment, stating that the prime market is poised for a profitable period.

“We saw a sharp increase in short-term lettings deals before the election,” Gee said. “Homebuyers were waiting for certainty on taxation and policy announcements, and now they’re ready to jump back in.”

Gee predicts a long-term positive outlook, fueled by a more stable political and economic environment.

“Interest rates are currently the biggest factor,” Gee continued. “With lower base rates expected soon, leading to reduced mortgage costs, we anticipate an increase in market activity.”

Non-Dom Exodus: A Dampener or a Chance?

While the market seems bullish, some analysts are concerned about the potential impact of Labour’s tax policies on non-domiciled residents.

Pollack described the recent budget’s decision to increase taxes on non-doms as a “huge own goal” for the UK. He anticipates a potential exodus of non-doms from London, leading to a glut of super-prime properties hitting the market.

“This could soften prices for these properties and eventually trickle down the market,” Pollack said.

However, he remains optimistic about the overall London market. “Despite some serious issues, the UK still represents a safe haven compared to many other countries,” he explained.

Labour’s Historical Track Record

Both Pollack and Gee emphasised the historical performance of the London property market under Labour governments.

“The London property market has historically done well under Labour governments, and there is no reason why this should not continue under Sir Keir Starmer,” Gee said.

With a clearer political landscape and potential for lower interest rates, London’s prime property market appears well-positioned for a resurgence. While the impact of non-dom tax changes remains to be seen, the overall outlook is positive for those looking to invest in this dynamic market.