The London Real Estate Forum this year will undoubtedly be dominated by what the outcome of the General Election means for London property in the short and medium term.
Immediately after the General Election we saw share prices drop for housebuilders and some investors. Initial feedback from the Institute of Directors for executives remains one of uncertainty and possible delay to significant decisions on investment.
However, the drop in sterling means London continues to be seen as attractive for overseas investment. Our Winter London Office Crane Survey at the end of last year suggested the volume of construction may falter yet our latest version records that occupier demand for new space has remained resilient. This has in part been fuelled by the tech movement (it is national tech week this week) and a move towards demand for new space which is flexible and offers the ability for co-working. This is reflected in WeWork’s lease of 280,000 sq ft of space at Two Southbank Place this week. There do, therefore, seem to be silver linings to the clouds that have gathered over the last year.
In Central Government, Gavin Barwell, the housing minister, lost his seat as part of the Conservatives reduced majority. He was viewed by many in the real estate industry as a minister who understood housing. Eyes are now on who will replace him and implement the key proposals in the Housing & Planning Act.
Whatever happens at a macro level in Government, London Mayor’s priorities must be to continue the message that London is open for business, work with partners to deliver more housing and work with Central Government for more infrastructure investment in the capital. Stimulating the build-to-rent market in London and focusing on delivering a new London Plan will help to provide some stability.