Perhaps for the first since Tony Blair came to power it can be said, with justification, that we have an optimistic prime minister.
For an optimist the road can often be bumpy but crucially it is always leading somewhere.
Whatever his faults, Boris Johnson is, by nature, an optimist and with this optimism and positivity comes a feel-good factor that encourages spending and investment and boosts the economy.
Little surprise then that within days of the Conservatives impressive election victory last month Hong Kong based K&K Property Holdings paid £130m for Orion House, an office building in Covent Garden.
Overseas buyers from across the globe are now seeing a window of opportunity to lock into the relative weaknessK&K’s chief executive, Kino Law Kin-yat stated: “The office building will provide attractive rental income” and then confirmed that his company will “actively explore opportunities for different types of commercial projects.”
For Mr Law, a former UBS investment banker, it seems that Orion House is just a first foray into the UK market.
Moving even faster than Mr Law and his team, a fellow Hongkonger, a successful businessman in his thirties, snapped up a £65m Belgravia mansion within hours of the polls closing.
The Belgravia Gate deal, thought to be the highest price paid for a penthouse in London throughout the whole of 2019, was brokered by high end agents, Beauchamp Estates.
Having been the biggest overseas buyers of UK property between 2015-2018 Hongkongers' enthusiasm, after a brief lull early in 2019, surged back strongly in the final months of the year.
Against a backdrop of turmoil and uncertainty back home eclipsing anything in the UK, the momentum from the territory, which was building before the election, has been positively turbo-charged since.
Of course, it is not just Hongkongers who welcomed the clarity a thumping Tory victory delivered.
Overseas buyers from across the globe are now seeing a window of opportunity to lock into the relative weakness of sterling before Conservative manifesto proposals for a further 3 per cent stamp duty surcharge on non-UK residents is introduced.
While Brits have obsessed about Brexit for the last few years it is probably fair to say that for most overseas investors the allure of London and the UK never really faded, as evidenced by the exchange rate induced surge of investment after the referendum result in 2016.
While ardent Remainers seemed to lose a sense of objectivity about the UK’s place in the world, well-informed people in Dubai, Moscow, Hong Kong and New York to name but a few, never did.
They continued to see us as the fifth largest economy in the world, a global trading powerhouse with an infrastructure, regulation and legal system that are the envy of the world.
Geographically well placed, resilient, business friendly and dynamic – why would they not want to invest here?
Now, with sterling expected to strengthen progressively as political and economic uncertainty clears and trade deals are agreed with the EU and other nations across the globe, overseas investors have even more incentive to move quickly.
The window in which overseas buyers can achieve maximum benefit is limited before the potential stamp duty surcharge is introduced.
It is worth remembering, the additional stamp duty on Belgravia Gate would have equated to nearly another £2m.
This almost certainly explains breaking news that the Chinese owner of the “Cheesegrater” skyscraper in the City, Cheung Chung-kiu has now agreed to buy a 45-room mansion overlooking Hyde Park for between £205m and £210m.
When the sale completes in the next few weeks it will officially become the UK’s most expensive home although Mr Cheung may renovate and convert the property into apartments with a potential value up to £700m.
Of course, it is conceivable that as 2020 progresses negative sentiment over the prospects of the UK’s future trading relationship with the EU might start to kick in once again.
This, along with sellers jacking up their prices, may begin to temper the boom that has already begun in overseas investment.
Notwithstanding that the timescale for achieving a deal is tight it must never be forgotten however, that the EU are massive net exporters to the UK.
They have every incentive to agree a deal before the end of the year.
While the French buy Citreons and Peugeots the Brits buy BMWs and Mercedes.
Furthermore, Boris no longer leads a weak minority government that can easily be bullied by EU negotiators and while negotiations will no doubt still go down to the eleventh hour it seems likely that a deal can be achieved.
Of course, in the unlikely event that this optimism is misplaced, a hard Brexit would almost certainly see sterling falling back again and result in lower prices for overseas investors as their own currencies appreciated against the pound.
Whichever way you cut it then it seems that the prospects for overseas investment in prime London and the wider UK, both residential and commercial, are pretty, bloody good.
Of course, this level of optimism may be frowned upon by the pessimists, but it cannot be denied that the dam has been burst by a Boris victory.
At this point the words of CS Lewis seem quite pertinent: “There are far, far better things ahead than we leave behind.”
Brian West is a private client manager at Conrad Capital
