9th December 2016
If you were to sum up 2016, in one word, what would you say? It’s certainly been full of surprises. Britain rocked the country by voting to leave the EU, David Bowie passed away and the world is still trying to get it’s head around the fact that Donald Trump was elected President of America.
It’s an unusual year to say the least.
However, whenever something new comes to fruition, the first thing that run through our heads, is whether or not it will affect us, and more importantly, how. And when it comes to the UK property market, there is a chance that the election of Trump could in fact result in an influx of companies and investors heading to the UK from Europe, China and the Middle East.
In the path of uncertainty and instability, people tend to consider their options. Facing both the unknown and an uncertain market, investors could feel reluctant to invest on American soil. And when it comes to property, central London property is certainly appealing.
Simon Tollit, central London’s Sales Director of Sotheby’s International Realty is of the opinion that Trump’s election will actually increase investment into the Uk’s property market, with a particular emphasis on London. It’s a sound choice for anyone who is destabilized by the idea of a new elected party and the possibility of policy changes.
Interestingly, despite property prices rising by 13% in the UK, they’ve actually fallen 10% for those investing with the dollar. Combine this with the appeal of historic London, steeped in culture and opportunity, and it’s easy to see why the UK’s capital is such a desirable option.
Back when Brexit was all kicking off, President Obama warned the UK that leaving Europe would be detrimental for trade deals However, Trump has suggested the opposite, publicly showing his support for Brexit, which means favourable trade deals could benefit the UK’s property Market.
Charles Curran, the Principal of Maskells, is also of the opinion that the election will benefit the UK property market.
He stated: “Sterling has already strengthened against the US dollar which, notwithstanding a potential [interest rate] hike in the US in December, may start reducing some of the post Brexit inflationary pressure in the UK. This is good for mortgage payers as it reduces the likelihood of the Bank of England’s hand being forced to increase rates to counter a strong dollar; the currency in which many of imported products are priced.”
However, London house prices could in fact rise until policies have been put in place by Trump. It’s also important to note that it’s impossible to say for definite the impact the election will have on the UK’s property market.
For landlords though, it’s food for thought.