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As we close the door on 2016, a year that held many surprises for the UK and its property market, we look forward to 2017 with optimism and anticipation.
Of course, 2016 saw the UK vote to leave the European Union (EU) and the effects of this are set to continue this year as we negotiate terms on which to leave the single market and await the activation of Article 50. Until this happens and the uncertainty settles, the true impact is unlikely to be felt.
Additionally, we hope 2017 is the year in which we call the bottom of the market; there’s no doubt there has been a slowdown in transactions, particularly at the top end, thanks to the EU referendum and stamp duty reform, and we won’t start to see it picking up until we establish it won’t go any lower. This is what happened in 2008; after a short period of time, experts recognised the bottom of the market and activity started to return as buyers who were holding off began to transact again. Agents are beginning to speak of glimmers of life in Prime Central London, so we hope people will realise the market has no further to fall and they will be driven to invest in London.
Overseas, there is a number of political events which could impact the London property market. Firstly, the French election; following Brexit, France is not ruling out a shock result, with far-right leader of the National Front, Marine Le Pen, expected to have a good chance at the Presidency. We have already seen large amounts of French investment in London in recent years and could see more in the event of Ms Le Pen’s – nicknamed ‘Madame Frexit’ – success.
Germany will also hold parliamentary elections in September 2017, with the right-wing Alternative for Germany party (AfD) growing in popularity. As such, we may well see increased investment from people from Germany who wish to invest their money in a country with more political stability. Of course, the triggering of Article 50 and access to the single market will be a key part of whether London remains an attractive investment option.
Furthermore, back in the UK, the changes to tax rules for non-UK domiciled individuals are also likely to impact on the appeal of UK property; we expect to see demand from people wishing to purchase property overseas, particularly in Europe, as people try to avoid being taxed on their worldwide income in the UK. Enness will be at the forefront of catering for this demand, with the strengthening of our international offering and official launch of our Monaco office.
It will be another exciting year for Enness and we hope it will be for all of our readers as well.