Trump ef­fect could bring Lon­don’s prop­erty mar­ket back to life

Financial Mirror (Cyprus) - - FRONT PAGE -

Pres­i­dent takes of­fice in the New Year.

How­ever, the Trump vic­tory was some­thing of a shock to the po­lit­i­cal sys­tem and it could re­sult in a pro­longed pe­riod of un­cer­tainty and downward pres­sure on the dol­lar. It could be that what­ever hap­pens to the dol­lar, there are likely to be Amer­i­can in­vestors look­ing to buy in Europe and Lon­don is the ob­vi­ous choice as a safe haven.

It is not just Amer­i­cans whose prop­erty buy­ing habits could be changed by the Trump vic­tory. For­eign buy­ers, par­tic­u­larly those from the Mid­dle East and of Mus­lim faith could choose to in­vest in Lon­don. Trump’s thoughts on Mus­lims are well known and wealthy Arab real es­tate in­vestors are un­likely to want to put their money in the US prop­erty mar­ket.

New York and Lon­don are his­tor­i­cally ri­val prop­erty mar­kets for prop­erty in­vestors so the US elec­tion re­sult could be good for Lon­don. The Aus­tralian prop­erty mar­ket could also ben­e­fit as it too is re­garded as a safe haven for prop­erty in­vestors. How­ever, it does have more re­stric­tions on over­seas buy­ers than mar­kets like the UK.

The US elec­tion could also re­sult in a change in buy­ing habits for South Amer­i­cans who have tra­di­tion­ally bought in places like Florida, with Por­tu­gal the ob­vi­ous other mar­ket as well as Lon­don.

Es­tate agents in Lon­don be­lieve that the elec­tion re­sult could see a rise in Amer­i­cans buy­ing in St John’s Wood, Kens­ing­ton and Chelsea in Lon­don as th­ese lo­ca­tions are con­ve­nient for Amer­i­can schools. How­ever, oth­ers point out that Amer­i­cans have never been pro­lific buy­ers in Lon­don and can be put off by com­plex tax li­a­bil­i­ties, but they could be keen to rent.

It is also pos­si­ble that Amer­i­cans may look to buy if they be­lieve that the dol­lar will weaken sig­nif­i­cantly when Trump starts im­ple­ment­ing his poli­cies such as on im­mi­gra­tion and trade. Lon­don ticks the boxes in terms prop­erty mar­ket in cul­tural city.

So, the Trump ef­fect could bring the prime prop­erty mar­ket in cen­tral Lon­don back to life as it has been hit by stamp duty change and to a lesser ex­tent Brexit. This will, of course, have an ef­fect on the rest of Lon­don as prices will rise and those priced out of prime will look lower down the lad­der.

On the face of it a sud­den in­flux of buy­ers, from Amer­i­can or else­where, might not be great for the Lon­don prop­erty mar­ket, push­ing up de­mand which in turn will push up prices at the top of the hous­ing lad­der which will then per­me­ate down to first-time buy­ers. So the Trump ef­fect, if it comes to be, might not be the great news that ev­ery­body wants. of a be­ing a strong thriv­ing multi-

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