The Good News about the Election
The waiting is over—the Prime Minister has announced that the election will be held on July 4th and has already sought the King’s consent. Winston Churchill was the last Prime Minister to call an election in July, and it did not go well for him.
History shows that no incumbent party has gone to the country when trailing by 20 points behind in the polls. Not all MPs welcome the snap election. Many Tory MPs who are standing down or look likely to lose their seats ‘thought they had months left’ to find new jobs and tie up loose ends, says Rachel Cunliffe in the New Statesman.
But although Labour is likely to be the next party in power, it is far from a done deal. It needs to gain 150 seats to reach the 326 needed to have a working majority. To climb this mountain it needs to secure the biggest swing since Tony Blair took office in 1997.
From what I can glean from talking to traditional Tory voters, on this occasion, they won’t vote Reform; they just won’t vote. If this turns out to be the case, then the interesting factor is not whether Starmer is the next Prime Minister but what majority to do as he chooses.
Personally, I think he has made the right decision. All around me, I see stagnation and indecision as people wait for an end to this uncertainty. Of course, in many cases, a change of Government will be business as usual, but there is always a threat that it might not be. For those for whom a decision can be postponed, they would rather wait than take action now and regret it later.
A neighbour of mine is trying to sell her sweet business. She never imagined it would not sell quickly because, during COVID-19, most of her competition was wiped out, but she could not find a buyer. The only people interested are those who know they are the only buyers and offer silly prices for the bits they want.
Then there is a member of my club who has a good position with SalesForce but cannot find a suitable job to move to. She has a sterling track record, but for personal reasons needs to relocate. The companies she would like to be employed by are not hiring - it is too risky. They want to keep their powder dry.
From my experience as a Fellow of the Institute of Taxation, the electorate is not only interested in which party is voted in as a new Government and how much the majority is but also what it says in its first Budget. What will it do to tax the rich, give support to businesses and assist inward investment into the country?
What appears likely is that Stamp Duty Land Tax for foreign buyers will go up from 17% to 18%. For a £ 10 million investment, this is a tax of £1,700,000, which is set to rise to £1,800,000. Even the wealthiest foreigners will think twice before buying a home in the UK when additional changes could be made that could affect them.
Even though a foreign buyer won’t be directly affected by the change in the non-dom rules because they only apply to foreigners who choose to live here, the changes to the non-dom rules could affect the value of the property on a resale. John White, head of Knight Frank in Mayfair, says the market is not just stagnant but dead. This is the difference between ridiculously low offers being made and no offers at all.
The same story is true in the best parts of Battersea, where a friend of mine took 18 months to sell his prime property in Prince of Wales Drive, with only one offer made - which, after a bit of haggling, he accepted. I have heard the same picture painted in prime places in Holland Park - not just low offers - no offers at all!
Damien Jefferies, head of Prime London property, tells the same story. The apartment featured in this blog was on the market one year ago at £12 million. Six months ago, it dropped to £ 10 million and is now looking for offers in excess of £ 7.5 million. There have been no offers, even with the increase of SDLT in prospect.
The apartment is stunning. It has a roof terrace with a 360-degree view over London spanning from Kensington Palace in the West to Harrods to the South, with uninterrupted views of Hyde Park. To the east are views of the Shard and Post Office Tower, and to the North (West) Wembley Stadium and Grenfell Tower.
Refurbished to a high standard, the apartment boasts five bedrooms, four en-suites, and two large reception rooms with high ceilings and period features throughout, although with modern comforts like air conditioning. Although one of the ensuite bedrooms is up a fire escape, it is perfect for a yoga studio, staff accommodation or office.
Properties such as this do not come on the market often, and when they do, they are snapped up quickly. Of course, although it may take a few months, there will be a surge when pent-up demand is released. For now, the brave can buy the best at rock-bottom prices, which they won’t see again for at least 4-5 years.
If you would like to find out more, listen to Damien’s podcast and phone Damien Jefferies on 07843 034525.