by Alex Christou on Nov 24th, 2016
After long, dreadful campaigns for both the Republican and Democratic parties, the US election has finally come to an end with an unexpected victory for the Republican party, naming Donald Trump as the next President of the United States. Trump launched his controversial campaign on June 16th, 2015 and surprisingly beat out 16 other candidates in the primaries, the largest field for the Republican nomination in 100 years, in July of 2016.
Much of the UK woke up on November 9th to the surprising news that Democratic front runner, Hillary Clinton, had conceded to Donald Trump in what was a historic upset not only for America, but the world. Prior to the election, many US citizens, including several celebrities, such as Miley Cyrus, will.i.am, and Samuel L. Jackson, threatened to leave the US if a Trump presidency became a reality. These threats began when much of America, including Trump himself according to CNN, did not see the real estate mogul making it to the White House. The whole world was watching to see what kind of immediate impact there would be following the election.
On Election Night, more people became interested in leaving the US as the results came in. In fact, Canada’s immigration website received so much traffic that it actually crashed. In addition, Californians were so frustrated and created a Brexit inspired hashtag,“#Calexit,” which was trending on Twitter. British property website, Zoopla, saw a significant spike in American traffic. Lawrence Hall, a spokesman for Zoopla, said that, on November 9th, the website experienced 45.3% more American-based traffic than on average for the past 30 days. Hall added that London has been receiving the most American interest in the past 6 months with many focusing their house hunting in top end neighbourhoods such as, Chelsea, Hampstead, and Marylebone. This supports the prediction made by Anthony Codling, Managing Director of UK Residential Property at Jefferies, that effects of the election on the rest of the UK, specifically housing markets, are likely to be more limited.
The recent fall in value of the pound against the dollar is making London “cheaper” for Americans to escape to. According to the Evening Standard, those buying using the dollar can see about a $62,000 savings on a typical London home and even more of a savings on the more expensive homes in the areas of London Americans are interested in. Russell Quirk, emoov CEO, believes that London’s top end market has the highest chance of benefitting from Trump’s victory. Domestic buyers have been seeing a 13% increase each year on house prices. Nick Davies, Head of Residential Development at Stirling Ackroyd, says Americans are seeing almost a 10% decrease in London property prices from a year ago.
Many have compared the 2016 presidential election to the recent Brexit vote in June as the outcomes were unexpected in both and they both have a global impact. Nigel Greene, Founder/CEO of DeVere Group, compared the two votes by saying, “The Brexit result was a real shock and created instability in the UK. But this is a far bigger deal as this creates instability on a much wider, international scale.” The economic and financial uncertainty has gone on a lot longer than Brexit as well. It began when Trump launched his campaign a year and a half ago and will continue until at least January 20th of next year when he is inaugurated into the Oval Office. Many Britons hope that the those in the US that follow through with their plans to leave will come to London and mitigate the economic effects of Brexit.
The London property market is expecting more than just a wave of fleeing Americans. While London already has a lot of foreign investors, the housing market can expect even more, as investors will be looking at London as more of a safe haven compared to New York. Many are anticipating that wealthy people from the Middle East, Europe, and China will change their minds about moving to large US cities like New York City and come to London instead.
Wealthy real estate investors from countries like the United Arab Emirates and Saudi Arabia may think twice before moving or investing in American cities as Trump has expressed his anti-Muslim ideals and policies throughout his campaign. However, Trump seems to be pulling back on these controversial policies that he expressed during the campaign as he has taken his “temporary ban of Muslims from the US” stance off his website. It has yet to be seen if he will be forgiven by the world’s Muslim population. Currently there are $5.1 billion (~£4.1 billion) worth of Middle Eastern investments in the US and $2.7 billion (~£2.16 billion) in London alone. London real estate news website, DealMakerz, predicts that these number will significantly change in the next 12-18 months. Whether or not Trump follows through with everything he said during his campaign once he’s in office can decide if their prediction will come true.
There are some executives in the industry that believe American’s should stay home or don’t believe that those who threatened to leave the US will follow through. Liam Bailey, Knight Frank’s Global Head of Research, thinks that the strength of the US economy is a good reason for Americans to not move out of the country. Andrew Langton, chairman of Aylesford International doesn’t believe that the UK is welcoming enough that it would attract many Americans, referencing the tax system and Brexit’s anticipated immigration restrictions. Others believe that Trump was the last piece needed to create the perfect storm, along with Brexit and the stamp duty, leading to the destabilization of the UK housing market.
However, Peter Wetherell, CEO of Mayfair estate agent Wetherell, is looking forward to a Trump presidency and what’s in store as it “will bring in a property industry leader into the White House for the first time in American history.” Wetherell predicts, “without a doubt, a Trump presidency will be pro-property and pro-real estate.” Another reason that UK citizens are happy about a Trump presidency follows President Obama’s criticism of the Brexit vote to leave saying that the UK is at the back of the queue as Washington is searching for new trade deals. President-Elect Trump, who owns two golf courses in Scotland, told Theresa May in a conversation soon after his victory that the UK is a “very, very special place” for him and that he wants to rekindle the relationship that Margaret Thatcher and Ronald Reagan shared in the 1980s. Hopefully President-Elect Trump will benefit the UK and will provide good change for the global economy as a whole.