Real estate and property development companies cheered as the ruling Conservative party triumphed in the polls on Friday, news that put paid to fears of a "mansion tax" that would have imposed by a Labour government.
The benchmark U.K. FTSE 100 closed provisionally up 2.3 percent on Friday, with homebuilders steeply outperforming, after it became clear that Tory Prime Minister David Cameron would be leading the country for a second term.
If elected, the opposition Labour Party had promised to introduce a so-called mansion tax on residential properties worth more than £2 million ($3.1 million), in order to help fund additional spending on the National Health Service.
On Friday, real estate agents forecast that the "prime" housing market would rebound under a second-term of Conservatives, with the mansion tax specter exorcised.
London-focused realtor Douglas & Gordon forecast residential assets above £2 million would rally a steep 20 percent in the next 12 months and double over the next five years.
"This is a very bullish outcome for London real estate markets at all price levels," said Ed Mead, executive director at Douglas & Gordon, in a note.
Miliband hoped to raise £1.2 billion from the mansion tax, which would have been progressive, with those owning properties worth £2 million-£3 million paying an extra £250 per month.
The tax would have applied to less than 0.5 percent of U.K. homes, according to Labour, and the vast majority would be located in the ultra-expensive capital of London.
"This election result will force Labour to confront existential questions about its future and we think it will have to re-position itself as a more 'new Labour,' more pro-market party," said Mead.
Luxury real estate agent Savills forecast on Friday that the prime residential market would rally by around 23 percent in the U.K. over the next five years. This compared to an estimate of 19.3 percent for the U.K. housing market as a whole.
"With an effective Conservative majority, or Conservative-led coalition now looking like the most likely result, we expect much of the deferred demand from the pre-election period to flow back into the prime market over the remainder of 2015 and 2016," said Lucian Cook, Savills U.K. head of residential research, in a note.
"On the supply side, it will still take some time for the high levels of available stock that have built during a long period of pre-election caution to be absorbed and we expect that would-be sellers who had adopted a 'wait and see' approach pre-election will now bring more stock to the market," he added.