London's luxury real estate gets election boost

Real estate brokers in the U.K. breathed a sigh of relief after last week's parliamentary election left the Conservative Party in power. With the Labour Party losing the vote, the prospect of a "mansion tax" has diminished and prices are set to grow further.

The tax on properties worth more than £2 million ($3.1 million) was at the center of Labour's election campaign, spooking potential investors.

"It would have been a serious problem if Labour got in," Charles McDowell, an agent specializing in London prime property, said. "We went from very pessimistic to incredibly optimistic in a week," he added.

The Labour party also pledged to introduce a tax on overseas earnings for the super-rich. Many many London luxury property buyers are foreigners.

Many high-end property buyers held off ahead of the election. Sales in the central London boroughs of Westminster, and Kensington and Chelsea were down 9% last year, data from Capital Economics show.

"These clients are now resuming their search and I think we will see an increase in activity," McDowell said.

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