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Scottish independence may boost London property market

SINGAPORE — The London real estate market is unlikely to experience any major negative impact should Scotland vote for independence from the United Kingdom, said British developer Quintain Estates and Development.

SINGAPORE — The London real estate market is unlikely to experience any major negative impact should Scotland vote for independence from the United Kingdom, said British developer Quintain Estates and Development.

Instead, the market could receive a boost as many businesses based in Edinburgh had indicated that they were planning to move south to London should Scotland choose to separate, said Mr Charles Calverley, Quintain’s development director (residential). In the run-up to the Scottish referendum held today, companies such as the Royal Bank of Scotland and Lloyds Banking Group had said they were making contingency plans to relocate their operations in Scotland.

“The only implication of Scotland’s independence on the macro level is the effect it may have on the pound — the pound might go down in value. I don’t think there will be any direct consequences on the London property market,” said Mr Calverley, who was in Singapore yesterday to market the second phase of the company’s North West Village residential project in Wembley Park, located near the iconic Wembley Stadium.

He added that a weaker pound would even give overseas investors, such as those from Singapore, more reasons to buy properties in London.

His comments echoed a monthly property survey by property portal Rightmove that said London would be a logical destination, creating extra employment and knock-on demand for homes should Scotland-based businesses relocate to the UK capital.

Conversely, the portal said that should the pro-Scottish independence voters prevail, the outcome could potentially rattle consumer sentiment in the housing market.

But Mr Calverley said fundamentals are still looking good for London despite reports of slowing price increase in recent months. A Savills research report noted that an average of 35,000 homes are expected to be launched each year over the next five years, falling short of the annual demand of 50,000 homes. “The market took a breather around (the middle of the year), as it normally does. The top end of the market is still a little quieter, but things have started to pick up again in Zones 3-5. We still see demand outstripping supply. The challenge is on the developers to meet those demand levels,” he said. 

“Foreign investment from around the world is still going strong in London … The rental market is also good with demand from (across various segments) ... For example, some people face difficulties getting mortgages, so they go into renting. We’ve also seen corporate rentals coming forward a lot stronger.”

As such, London continues to be an attractive market for overseas buyers, despite the introduction of the property gains tax next year, which is specifically targeted at them.

Quintain has seen healthy interest from investors in Singapore who, along with those from Hong Kong, made up the majority of its overseas customers. Foreign customers accounted for nearly 30 per cent of the project’s overall sales in the first phase of the project.

In the past week, about 15 of the 25 units released for sale so far in the second phase have been picked up by buyers in Singapore and Kuala Lumpur, Mr Calverley said.

The Scotland referendum explained: 

 

 

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