As the world digests and reacts to the surprise result of the US presidential election and some are wondering how we will ever pick up the pieces in the wake of their apocalyptic predictions of the downfall of Western civilisation as we know it, it is decidedly possible that the London property market will see a net benefit from this news.
President-elect Trump will meet with advisors and colleagues in the coming days and weeks ahead of his inauguration in January 2017, but the one thing we can be assured of immediately is that very few experts and commentators thought this a realistic possibility. In the wake of this degree of surprise, markets have been left reeling and trying to work out what it means for them. One thing all markets hate is uncertainty, and the apparent lack of detail in most of Trump’s campaigning material does nothing to dispel the confusion – which is therefore likely to last until the new administration takes office.
So how will it all influence the property market in London? London Central Portfolio’s view that there will be a net positive impact on the market as investors retrench to blue-chip tangible assets.
Jitters in global equity markets driven by widespread speculation will be countered by a flight to safety, with gold, the Yen and Swiss Franc set to benefit the most. Whilst all of this plays out, Prime Central London property, a traditional safe haven, is expected to benefit from a similar flight to quality, asset-backed investments.
Meanwhile, property agent Spot Blue has also suggested that some US citizens may be looking for a change of scene in the wake of the election result. For those Americans who can afford it, they say, the UK could be an attractive place to escape to post-election – it’s further than Canada, we also speak English, the job prospects are good, the lifestyle exciting and, just as importantly, the exchange rate is looking very attractive to Americans at the moment.
Since the fall in Sterling’s value after the Brexit vote, agents in London are quoting the equivalent of a nine per cent fall in property prices in a year for American buyers – prices in the capital may have risen in Sterling value but the £/$ exchange rate more than counteracts this growth. This saving is equal to $62,000 on a typical London property, but considerably more for a home in one of the more expensive central areas favoured by Americans, which are Camden, Kensington & Chelsea and Westminster, home to the American School in St John’s Wood.