Domestic elections are rarely a factor in international real estate but what is happening in the UK may well create major ripples in one of the biggest residential markets in the world.

In prime central London, some 80 per cent of residential transactions involve one or more overseas parties – as buyer, seller or sometimes both. Confidence in the UK economy and the country's political stability is, therefore, crucial. So the unusual events of the UK's general election, scheduled for May 6 so now in full campaigning swing, may have far-reaching implications.

For the first time in over 30 years it looks likely that there will be no one political party in control; that means significant horse-dealing will go on between opposing parties after the vote, to get some form of coalition with a parliamentary majority.

So far so easy-to-follow – and, for the UK's citizens, it is all more exciting than usual. But the problem is this. The three parties likely to be involved in this negotiating post-election have sharply differing views of major activities that affect international confidence in the UK – the next steps for the fiscal stimulus; how to tax (or not) the banks and bankers' bonuses; whether real estate should be more heavily taxed; even the levels of public spending in the next year are all the subject of heated debate.

This too-close-to-call battle makes intriguing political theatre for UK voters. But what will it do for global faith that the country – and its commercial and residential markets – will ride the storm and come out of recession strongly?

We have another two weeks to wait… and, let's hope, global investors see it as a thrilling race and not a reason to take their investment elsewhere.

- Graham Norwood is Property Correspondent for The Observer. The views expressed are his own