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Euro - political impact

09th May, 2012
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After last week and the Greek elections, Alexis Tsipras is trying to form a coalition Government and Francois Hollande has been voted in as the new French President.

What they both have in common is that they oppose further austerity measures and instead, want to focus on economic growth something which is clearly favoured by their respective electorate.

These changes could prove beneficial to the already buoyant London prime property market.

Francois Hollande has been quoted as saying he “dislikes the rich” and has promised a wide-ranging left wing programme including a top rate tax of 75 per cent.

This has made London, as an international finance hub and its proximity to France a natural choice for French professionals rattled by Hollandes hostile mood towards the wealthy.

With the French already well established in Belgravia and South Kensington Knight Frank have reported that so far this year enquiries from French clients have soared 19 per cent.

With Douglas & Gordon experiencing so much demand that they are setting up a special French-speaking office.

However, there has also been concern that the recent rise in stamp duty rates now either 7% or 15% on £2m+ purchases depending on whether the property is purchased via a company or not, may move buyers away from London to Singapore and New York.

Ed Mead believes that in the coming months the only busy market place will be sub £2m, with the market above this price level becoming “constipated” due to  the consultation on who will be exempt from the new rates not due until the Autumn. He therefore, doesn’t expect many deals to be done before then with potential buyers holding off until the exemption criteria is known.

With RICS reporting that prices still rose in London during April whilst the rest of the UK declined, it is hard to see such a bullish market slowing down.

However, it must do at some point and maybe now could be the time that investors look further than the city to the country for their property investment and the relative value that this offers.

To speak with a Director at Elite property Search contact:

Central Office: Andrew Findley tel: +44 (0) 1865 479980

South East Office: Tim Sharp tel: +44 (0) 1483 256775

South West Office: Joe Nisbet tel: +44 (0) 1202 766566

London Office: Max Storey tel: +44 (0) 207 060 2338

email: info@elitepropertysearch.com

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About the Author
Tim Sharp
Tim Sharp is a director at Elite Property Search
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