We read a lot in the media about property prices falling across the board, although still up by a small percentage year-on-year. However, talking to the local estate agents, who probably have the best handle on what is really going on, it does appear that the Barbican housing market is getting back to normal after a temporary hiatus. True there is the uncertainty of a general election, which will have taken place by the time you get to read this edition of Barbican Life, and the longer term impact of the Brexit negotiations to come, which will undoubtedly see fluctuations with the ebb and flow of political posturing on both sides. But overall it seems that any price falls have been fairly limited and that now prices appear to have pretty well stabilised.
Indeed, the most significant factors affecting prices have almost certainly been the changes to stamp duty that came into effect earlier in the year. These have adversely affected the buy-to-let market and, perhaps more importantly as far as the Barbican is concerned, put up the costs of buying homes over £925,000, where the 10% stamp duty level comes in – or over £1.5 million where the rate is 12%.
Table: Stamp Duty and Buy to Let Rates
|Property purchase price||Stamp Duty Rate||Buy to Let/ Additional Home Rate|
|£0 – £125,000||0%||3%|
|£125,001 – £250,000||2%||5%|
|£250,001 – £925,000||5%||8%|
|£925,001 – £1.5 million||10%||13%|
|Over £1.5 million||12%||15%|
For the Barbican, the two lower levels are, of course, irrelevant, but most studio, one and two-bed apartments will fall into the £250,001 to £925,000 bracket and three bed (and some larger, better located and decorated one and two bed properties) into the top two levels – and this will include nearly all tower block flats, low rise triplexes and most ‘mews’ houses. But at least from the sellers’ point of view there won’t be the kind of pressure to drop the asking price below the relevant price threshold given nowadays stamp duty is graduated and one no longer has to pay the full percentage charge on the whole purchase price once it tops a specific threshold level.
But there’s little doubt, despite some protestations to the contrary, that prices, particularly at the upper end of the one and two bed apartment market have come down a little, although not much. Purchasers also seem to be becoming adjusted to the higher stamp duty levels at the top end of the market, as witness the comment from one of the estate agents about increased interest in tower block apartments.
The latest quarter represents something of a new milestone for the Barbican with the first residents moving into Blake Tower – previously occupied by the YMCA. The new flats have been built to a high specification. There are still around 16 left for sale, including a spectacular three-bedroom penthouse, spanning the 16th and 17th floors, which is coming on the market at £3.7 million (which definitely puts it in the top stamp duty bracket!). At the time of writing, 24 of the new Blake Tower apartments had already been occupied and the contractors are due to complete all work on the block by mid-summer.
LOCAL AGENTS’ COMMENTS
Tina Evans at Frank Harris: The last few months have seen an increase in people registering to buy with the most interest from prospective buyers for tower block flats, we have recently agreed a sale in excess of £2million with a disappointed buyer waiting for something similar to be listed. We currently have a 39th floor penthouse for sale which has spectacular views, and has been refurbished to an incredibly high standard. June will bring us yet another election and hopefully we will then see a little more stability in the financial markets and more confidence in the property market. As always if you would like an up to date appraisal of your property please do not hesitate to contact me. www.frankharris.co.uk
Glen Cook at Hamilton Brooks: The first quarter of this year was static with few enquires, but things changed in late March, more viewings took place and more offers came in. This pattern has continued in April and May. What has changed is the dynamic of the market. We have now moved into a more normal and balanced market, the average selling time is now 4 to 6 weeks, buyers carry out 2 or maybe 3 viewings before offers come in, but with patience and a correct price a sale will happen.
We are entering a new market phase, less buyers than previously, but buyers are serious, it appears the boom and bust selling cycle we have seen over many years has gone and now we have what you may call more ‘normal’ market conditions. www.hamiltonbrooks.co.uk
Nick Scott at Scott City: The uncertainty of the last year continues with now a call for a General Election. Barbican properties are mainly sold to owner occupiers unlike many areas of Central London so we are still seeing enquires albeit at a lower level than pre Brexit. Stamp duty has been the main cause for a slowdown in the market generally and we now wait to see if the government will make any changes. Asking prices have dropped a little over the last few months but this has encouraged activity so let’s hope as we move towards summer we see further upturn. For Barbican flats available please visit our web site:- www.scottcity.co.uk
Tom O’Halloran at Thomas Michael: We have seen an increase in buyers registering with us from around April onwards with some buyers specifying interest in new listings in Defoe and Willoughby. We have now entered a more balanced market and without the soaring price rises of previous years buyers are taking their time to ensure they are making the right purchase. Despite many self-styled ‘luxury’ developments springing up around the City the Barbican offers an ease and quality of life unrivalled in this part of town and this continues to be recognised by informed buyers. If you would like a market appraisal of your property please get in touch. www.thomasmichael.co.uk
Glen Cook: We have a healthy demand for rentals, we may have seen a slight over supply of unfurnished flats, which does happen from time to time. But overall demand is good. Presentation is important, décor/furnishings/floor finishings are the key to letting swiftly and acquiring good tenants, please seek advice before making expensive mistakes.
Joe Davison at Scott City: The rental market in the Barbican and City area has maintained a good level of supply, which works in the favour of the potential tenants looking in the area. This mean that it is crucial to get the rental price right, reducing the chance of a void period in rent. If the rental price is right, we have seen high levels of enquiries for these Barbican properties, and with summer just around the corner we expect these to remain high. We currently have a couple of properties ranging from studio flats to two bedrooms available on our website.
Tom O’Halloran: As we move into summer we prepare ourselves for the busiest time of year for lettings. Well-presented flats priced at the right level are always in demand within the Barbican and we always have a number of registered applicants actively looking. If you would like a rental appraisal or just to discuss the lettings process I would be pleased to hear from you.
Barbican Tower Block penthouses do not often come on the market. This one in Lauderdale Tower is being sold by Frank Harris with an asking price of £3.75 million