American emigrés comeuptrumps
As if they did not have enoughtodocoping with Brexit property predictions, now property experts have to look into their crystal ball and decidewhataTrump presidential win means for house and flat prices in London. Characteristically, it has stepped up to the plate — and its forecasts are positive in the short term but nervous about Trump’s ability to surprise even his closest advisors.
Richard Bernstone, director at Aston Chase, says: “The wave of disenfranchisement and appetite for change has clearly been voiced across the pond, just as it was here in June with the Brexit referendum result. From a prime central London residential perspective, while Americans have never been prolific buyers in London due to their complex tax liabilities, I am sure there will be some, perhaps those already renting here, that may decide to take up permanent roots in the capital.
“In addition, international dollarbased buyers who have been holding off following the recent weakening of sterling may now decide that it is the right time to buy, before the dollar starts to weaken in the wake of this election result, believing there is still value and safety in investing in what is still considered a strong property market in a thriving multi-cultural city.”
Charles Curran at Maskells says the future is bright. The new strength of sterling against the dollar may discourage some buyers but it reduces inflation in the UK, which is good for mortgage payers. “While we have seen Americans buying all over London, there is a preference for St John’s Wood, Kensington and Chelsea, due to the American Schools,” he says. “However we have also seen more Americans put their children into British schools, so our advice would be to buy in an area with low debt levels, to protect their capital from any market volatility as a result of Brexit.”
Alex Newall, managing director at Hanover Private Office, believes a historically cheap pound might persuade Americans to jump into UK property, as borders tighten around America. “While we have already seen notional signs of USA buyers in the prime central London property market, we could see more emerging fairly soon. From disgruntled LA pop stars to the New York business elite hedging their bets, the west and east coasts who voted for Clinton maybe looking towards London as a good alternative. And why not? There are already many American community schools here, both in London and outside. US investment banks are numerous in the City and this is generally a multi-cultural society which welcomes Americans. Currently Belgravia is top of the list for one of our USA buyers.”
Research by estate agent Stirling Ackroyd shows that, for buyers from America, properties in London are $62,000 cheaper than in October 2015. The typical London home is now worth $612,896 (£495,000). In addition to lower house prices and the lower cost of living following the fall in the pound, London has other pull factors for Americans — the same language, strong cultural ties and even regular NFL games at Wembley Stadium. Some 61,000 US citizens already live here, according to Democrats Abroad UK.
As an alternative home for disaffected democrats, London would make more sense than perhaps Australia or New Zealand, points out Maskell, the other alternative being Hong Kong, where property prices can be much higher than London.
For Trump enthusiasts looking to move to America, expect little change in prices. Tranio, a London-based overseas property expert, says American property price movement in election years are not significantly different from non-election years.
“Trump’s anti-establishment campaign approach, coupled with his many comments either implying or declaring a strategy of unpredictability, have two basic implications for investors and homebuyers: change and uncertainty,” says Tranio’s Bianca Jutaru.
“Observers still do not know what to expect from Trump’s first months in office — whether he will push forward with his ‘America first’ economic policies, or temper his approach and embrace a more moderate strategy. This general uncertainty will keep markets on edge. In this scenario, hopeful homebuyers may need to hold their breath and wait... Trump’s intentions with respect to housing policy have not yet been clearly defined but he has stated that he wants to roll back regulations in the construction industry.”