While the start of handling of the UK’s covid-19 crisis may have raised concerns, London’s luxury real estate market could recover as quickly as it came to an end. In contrast to the Parisian market, London real estate is emerging from a period of instability linked to Brexit. Indeed, the successive postponements of leaving the European Union and the lack of visibility on the future relationship between London and Brussels had cooled investors. “The situation in London was very different from that in Paris. We are emerging from a long period of uncertainty caused by Brexit. It has resulted in a drop in the number of transactions and a drop in prices “, explains Chloé Rullaud, Director of BARNES London.
London, a bustling market before the lockdown
Boris Johnson’s victory in the December 2019 general election gave buyers confidence. Political stability has breathed new life into the London property market. “Since the start of 2020, we have been in a rising market. The number of transactions as well as the prices increased again. We expect business to resume at least as quickly as the shutdown observed during the lockdown, “said the Director of Barnes London.
In fact, property prices increased by 5.2% in Q1 2020 and the number of property transactions by 20% in Prime Central London, compared to Q1 2019. 30% more properties were offered for sale in Prime Central London for the same period.
Safe haven status for prestigious international real estate
The current context is unlikely to upset the status of London. The decision not to postpone Brexit alleviates many concerns. Chloé Rullaud believes that “in this context, there will be good business. The pound sterling has fallen and there is an influx of local and foreign investors turning to luxury real estate “.
Despite a 40% drop in the number of promises to sell during the lockdown compared to the year before, 2019 which was a period of crisis due to the postponement of Brexit, investors remain confident. Sellers have left their belongings on the market during lockdown unlike last year when homes were pulled from the sale. This indicator is a very good sign of confidence in the market. In addition, many buyers have waited until the Brexit uncertainty was over to complete their plans. Some, having been in research for two years, are in the midst of their buying phase.
London real estate has always recovered quickly from crises
Thibault de Saint Vincent, President of Barnes, underlines that “London remains more than ever the safe haven for prestigious international real estate and confirms its status apart”.
The British capital has several assets to attract expatriates. Its geographical position makes it a bridge between the United States and Europe. The City offers opportunities to business people around the world. The various London schools are renowned and provide instruction in English which appeals to many families. Finally, London offers very interesting tax advantages for expatriates like the resident London and with a real estate yield of almost 3%, the British capital has everything to maintain its prestigious status for several years to come.