As the world braces for an unprecedented year of elections, the ripples of these political events will be felt far beyond national borders. With nearly half the world's population heading to the polls in 2024, including in major economies like the U.S., France, and the U.K., investors are closely watching how these elections could influence markets, particularly in the property sector.
For the UK market, where foreign investment plays a significant role, the outcome of these global elections may introduce both challenges and opportunities.
Managing Partner at United Kingdom Sotheby’s International Realty, Claire Reynolds explains, “Historically, we've seen elections create short-term uncertainty in the property market, as buyers tend to adopt a 'wait-and-see' approach. This is especially true in London, where a substantial portion of our buyers are international. Political changes overseas can significantly impact their investment decisions.”
The U.S. Election: A Key Driver of the London Market
One of the most anticipated elections of the year is the U.S. presidential election. The influx of American buyers into prime central London (PCL) has been notable in recent years, fueled by both political instability and the wonderful lifestyle opportunities London offers. With the upcoming election, experts are expecting this trend to intensify.
“Regardless of the election outcome, we expect continued interest from American buyers,” says Claire. “A Republican victory could lead to further deregulation and tax cuts, which may prompt more Americans to invest in overseas properties, including London. On the other hand, if the Democrats win and push for tax hikes, many wealthy individuals may feel even more compelled to diversify their assets abroad.”
In 2024, U.S. buyers accounted for a substantial share of international purchases in PCL, and the glamour of London continues to attract high-net-worth individuals. The city’s global connectivity, and world-famous educational institutions, not to mention its status as a major cultural player, remain major draws, even during political uncertainty.
Europe: Political Shifts and Tax Implications
Beyond the U.S., European elections are also poised to affect the UK property market. In France, for example, proposed reforms to inheritance tax laws could push wealthy individuals to seek more tax-friendly environments abroad. Switzerland, another major competitor in the luxury property market, has already seen investment flows shift due to its recent tax reforms.
“The proposed changes to France’s inheritance tax regime have definitely raised eyebrows,” says Claire. “But while Europe’s tax landscape is evolving, London remains a stable, attractive option for buyers. Our data shows that the U.K. continues to draw in families seeking long-term stability. Nearly 22% of purchases this year have been made by parents buying homes for their children.”
Stability Amidst Global Uncertainty
Despite concerns about potential policy changes, the U.K. property market has shown remarkable resilience. Recent figures from United Kingdom Sotheby’s International Realty reveal that London’s appeal goes beyond financial considerations. Lifestyle and family-related factors are increasingly driving buyers' decisions. Only 16% of buyers in PCL this year were motivated purely by investment potential, while most purchased homes as primary residences or second homes.
"London is more than just an investment; it’s a lifestyle choice," Claire remarks. "This year alone, we’ve seen an increasing number of parents investing in properties for their children’s future, which underscores the city’s enduring appeal as a stable, safe haven."
A Positive Outlook for London
While global elections could introduce uncertainty, the U.K. market remains a safe bet for high-net-worth individuals. The financial stability offered by London, combined with its lifestyle benefits, ensures that it continues to attract foreign investment, even in unpredictable times.
Claire concludes, “In times of uncertainty, London’s property market has proven time and again that it has staying power. Buyers may pause, but they rarely walk away entirely. In 2024, despite the global wave of elections, we’ve seen very little disruption in terms of our high-value transactions. 82% of our sales were completed in cash, and in one case, a buyer who initially withdrew returned and completed the highest-value transaction of the year after re-evaluating their options."
As the world watches elections unfold, the London property market, buoyed by a combination of the allure of London and what it has to offer, as well as financial stability, is expected to remain resilient, continuing to attract both international and domestic buyers for a long time to come.
