For London property, Trump win is net positive

Now that the dust has settled on Donald Trump’s surprise win in the poll, real estate professionals around the globe are debating the potential implications on global markets. In what can only be described as an uncertain world economic situation, there are worries around oil price stability along with the dollar value.

Both are factors that could lead to greater global economic insecurity.

For London, its historic position as one of the world’s most secure property locations may well be improved as investors seek out reliable investments. The fallout from Brexit won’t last that long and buyers from around the world will soon forget.

The appetite for change has clearly been voiced in the US, just as it was in the UK in June with the Brexit referendum. While US nationals have never been the heaviest investors in London due to complicated tax liabilities, I am sure that there will be Americans, perhaps those already in a rental property, who decide that now is the right time to take up permanent residence in the UK capital.

It could become the chosen destination for those who are looking to leave America. However, the UK capital could be the choice of not just Americans but also the wealthy from China or the Middle East, many of whom would have chosen to live in the city of New York.

In addition, international dollar-based buyers such as those from the Middle East, who have been biding their time following the recent sterling drop, may decide that conditions are better. Luxury property in up and coming areas of London will be seen as attractive investment opportunities due to the lower pound.

The sentiment among London property agents following the Trump election is generally optimistic. His victory brings the world’s largest economy into a pro-business, pro-property narrative.

Despite a general distaste for Trump, our commercial and residential property markets could end up beneficiaries from his presidency. Until now the UK has appeared as a political anomaly since the Brexit vote, for having turned its back on the economic consensus that favoured large trade agreements. Post-Trump, Brexit appears to be part of a wider political movement.

London’s biggest rival across the pond for real estate investment, New York City, relies heavily on how Wall Street is faring as well as the normal drivers of supply and demand and its strong reputation as a safe haven. Wall Street has already seen some returns on the back of Trump’s win, particularly for construction companies, which will bolster confidence in the sector.

Trump’s economic ideology consists of large tax cuts and increased investment in infrastructure, which could provide welcome boosts to the property market. I am sceptical of any adverse impact on housing markets in trusted locations such as New York, which will remain a global go-to for investors for years to come.

And it’s to be noted that enquiries from potential American purchasers for London property has shown a big upward swing since Trump’s election.

— The writer is managing director, Fraser & Co.