London’s high-end housing market could benefit from political uncertainty in Europe and the U.S. this year despite ongoing Brexit negotiations, according to a report released Wednesday.
In its latest health check of London’s luxury housing market, global real estate consultancy Knight Frank said that the U.K. capital could benefit from geopolitical uncertainty, including a full calendar of European elections and a U.S. president whose "style marks a break with convention" as foreign buyers may seek a safe haven for their money.
More:Sky-High London Rents Finally Fall
"Traditional safe haven assets like gold and secure government bonds have seen fresh investor inflows in the first quarter of the year and it is the same trend that has traditionally benefited the prime central London property market," said Tom Bill, head of London residential research at Knight Frank.
At the same time, he believes foreign buyers will be attracted to London homes thanks to the currency savings to be made on the weak pound.
A U.S. buyer moving to prime central London, for example, would have benefited from an effective discount of 21% in the months between the E.U. referendum in June and February thanks to currency movements and changes in house prices.
While the Brexit negotiations will merit a lot of media coverage, Knight Frank stressed that it should be remembered that Brexit has only had a marginal impact on the prime London property market to date.
More:London is Favorite Destination of Ultra Wealthy Home Buyers
As a result, the report predicted that house prices will be flat in 2017, after a drop of almost 7% in the year to February. Though one ongoing issue that is expected to continue to impact demand is sky-high stamp duty rates for buyers of expensive properties.