Politicians, business leaders and the media would have you believe that the way Britain votes in today’s EU referendum will have a long-term impact on London’s economic prosperity…
…And whether luxury property in areas of prime central London such as Belgravia will remain a wise investment.
Although the outcome of today’s referendum will do nothing to silence debate about Britain’s role in Europe, it will go a long way towards determining the health of the residential property market in Belgravia and neighbouring Knightsbridge, Chelsea, Mayfair, South Kensington, Pimlico and Westminster for the next six months and beyond.
The best-case scenario for the property market in prime central London would be for Britain to remain in the EU.
Political and economic uncertainty often causes buyers and sellers to put their property plans on hold. Here at Best Gapp, we are aware of potential investors in prime central London property who are waiting for Britain’s status within the EU to become clear before deciding whether to purchase a home in walking distance of Mayfair’s luxury shops and restaurants.
If Britain votes to remain in the EU, we predict the property market in prime central London will spring back to life on the back of rising confidence in the capital.
Best Gapp has noted a decline in the number of buyer enquiries in the second quarter of 2016 that is similar to the run up to the 2015 General Election. That was due to the top end of the London property market going into hibernation because of the Labour Party’s plan to introduce a mansion tax on the owners of homes worth £2m.
But following the Conservative Party gaining an overall majority – which gave Prime Minister David Cameron the opportunity to hold today’s referendum – buyers renewed their interest in property valued at £2m or more.
Rather than doubts about London’s status as a safe haven for property investment if Britain exits the EU, there is another factor behind the recent reduction in buyer activity. The introduction of a 3% stamp duty surcharge on second homes led investors to complete purchases before it came into force on 1 April.
What if Britain votes to leave the EU? London will remain one of the world’s greatest cities and a leading financial centre, attracting both internal and external investment.
The most desirable homes in Belgravia, Mayfair and Kensington were built long before the European Economic Community was formed in 1957, and their value will remain high whether Britain stays in the EU or not.
However, clouds of uncertainty will gather over the property market in prime central London and beyond for the two years it will probably take Britain to negotiate its exit from the EU.
On top of this, it is likely we will face another general election – creating yet more uncertainty in the property market.
The upside of a Brexit, however, is if predictions that the value of the pound will slump prove correct, property in Belgravia, Mayfair and the surrounding areas of prime central London will be better value for overseas investors, possibly stimulating activity among buyers from Asia, the Middle East and Eastern Europe.
Luxury homes in exclusive parts of London are in short supply. London is unlikely to ever have the number of homes the city needs to meet demand, which is why your prime property could be worth more than you think.
To discover how much your home in and around Belgravia is worth, contact Best Gapp’s valuations team today.