British Land indicates Tory election win will boost super-prime property

British Land indicates Tory election win will boost super-prime property

Property developer says pre-poll jitters and concern over mansion tax affected sales of most expensive homes

Property developer British Land has indicated that a Conservative election victory will revive the top end of the housing market after admitting that pre-poll jitters hit the sale of some of its most expensive homes.

The company behind the Cheesegrater building in the City of London and Meadowhall shopping centre in Sheffield said that while the mainstream market was resilient in the runup to the polls, demand at the upper end waned as potential buyers weighed up the threat of a mansion tax on expensive properties.

"In residential, the mainstream market remained relatively robust but the prime central London market softened, reflecting uncertainty ahead of an election and the risk of a mansion tax on properties above £2m," British Land said.

"The super-prime market moderated slightly, but we are continuing to see good demand for exceptional new build properties, such as Clarges Mayfair."

UK house builders and estate agents including Foxtons and Savills were among those to see their share prices rally when the result of Thursday's election became clear on Friday.

An unexpected Conservative majority put an end to Labour's pledges to impose a mansion tax on homes worth £2m or more and to cap rent rises in the private sector.

Announcing its full-year results, the company played down problems at the Cheesegrater, officially known as the Leadenhall Building.

In November, two of the bolts holding the building together snapped, causing debris to fall to the ground from the fifth floor. Nobody was hurt, but a subsequent investigation concluded that dozens of the bolts should be replaced.

British Land said on Thursday: "An investigation of the fractured bolts at the Leadenhall Building was completed in January 2015, and a programme of replacement is under way. The building has let up well, and we are continuing to see very good interest."

The building was completed last summer and is now 84% let or under offer, up from 53% at the beginning of the year.

The value of British Land's property portfolio increased by 14% in the year to 31 March, to £13.6bn, boosted by a positive economic backdrop, low borrowing costs, and strong demand among foreign investors.

Chris Grigg, chief executive, said he was confident about British Land's future because of its strategic focus centred on offices in London and the south-east of England, and the UK retail sector.

"As we look ahead, our results give us confidence we are well positioned for changing trends in the real estate sector: we have a modern portfolio focused on the right locations; a strong balance sheet with a low cost of debt; and an exciting development programme."

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