The media has been suggesting, at the very least, a hiatus in property price increases in the London area, although it appears the principal price fall sufferers have been at the real high end of the market, and in the outer zones with Zone 1 properties perhaps less affected. Certainly, if one checks asking prices on the websites of those agencies specialising in Barbican properties, prices seem to be holding up pretty well. But – and there’s always a ‘but’ – if one talks to the agents there is an indication that Barbican flat pricing levels are at best flat and may even be turning down a little.
Agents will be putting this down to ‘more realistic pricing’. In other words the froth is coming off the market. We probably won’t see properties being bid up to levels above the original asking price – which was the situation with some of the more attractive apartments only a couple of years ago – at least until the Brexit uncertainties are behind us – and that will be a couple of years away yet,
The writer, although someone who voted to remain, is not as pessimistic about any likely post-Brexit downturn as some. A good amount of the doom and gloom scenarios that surface in the press are from those opposed to Brexit both in the UK, and in Europe – the latter using the media to make their negotiating points. Scare tactics are the political spin of the day and In the long run it is to everyone’s benefit to come up with a series of win-win compromises. Maybe I’m over-optimistic but I suspect that in a few years’ time one will look back and wonder what has happened to the dire predictions of economic downturn once Brexit is a fait accompli – if indeed it is.
However, Computershare Loan Services, which administers more than half of all third-party serviced mortgages in the UK, has forecast that the value of 2.69% of properties in London could drop below the outstanding mortgage balance on the property if average house prices fall by 18.72% as they did between 2006 and 2009.
The figure is, however, the second lowest for any UK region except the South East and lower than the proportion affected after the last financial crash, when a similar drop saw between 7 and 11% of properties fall into negative equity. This is an improvement that Computershare attributes to providers lending more responsibly and complying with new regulations. For the Barbican, though, the Crossrail effect (see below), should mitigate any property value falls and the number of properties falling into negative equity could well be minimal, even if the worst case scenario arises.
Overall, we see property prices after a period of perhaps zero, or minimal, increase returning to their seemingly inexorable upwards path and micro-markets like the Barbican, which will benefit from the positive impact of Crossrail, will continue to be as positive as ever they were.
Indeed Crossrail – and there’s an article in this issue of Barbican Life looking at the latest assessment of benefits accruing to those living along the route – will be the balancing counter to any negative effects of Brexit (if there are any). The Barbican already has perhaps the best transport links of any residential complex in the whole of London with east-west and north-south tube lines and good bus route services at either end, and Crossrail, with station access at both the eastern and western ends of the complex, will further enhance these. Roll on 2019 when Crossrail (or the Elizabeth Line as it has now been named) should be fully open.
ESTATE AGENTS’ COMMENTS
Alex Childs at A.W. Childs: It’s been a very positive start to the year. We have noticed an increase in buyer confidence with multiple offers being made on properties that had previously had little interest. Hopefully this will continue however we are still advising clients to set realistic prices to attract the maximum amount of interest. www.awchilds.co.uk
Nick Scott at Scott City: Enquires for the City and especially Barbican has improved since mid-January 2018. Many owners have accepted that the market is tough and have priced their properties accordingly. This has encouraged activity which resulted in more sales so far this year. The Barbican continues to be popular and a desirable place to live with many new clients being introduced to it. We are starting to see a lack of good quality apartments for sale. Should you be considering selling please do not hesitate to contact me. www.scottcity.co.uk
Glen Cook at Hamilton Brooks: A steady start to 2018: Viewings are slightly down on last year, but we have seen consistent steady sales in January which are actually pretty good. Instruction levels are again slightly down, but that is normal for January/February. We find January/February/March could be a good time to sell because no one else is, and City bonuses are awarded in December but payable normally in February/March. Once the weather thaws out activity should pick up, certainly we are conducting more valuations, my prediction is zero price increase this year, if anything we could see 2 to 3 % reduction in the next 12 month period, but at the right price sales are happening, all in all almost a repeat of last year, which saw the busiest sales period we have ever had in May/June/July. www.hamiltonbrooks.co.uk
Tina Evans at Frank Harris: 2018 started off slowly, but in the last few weeks we have seen more positive activity with two tower flat sales (one was agreed and completed within a month), and buyers for Type 21’s, (one agreed before coming to the market in Speed House). Housing transactions across the UK were 5% lower in the year to October 2017 and we predict this will continue but believe that good flats priced at the right level and presented impeccably will sell. We will offer a “FREE” House Stylist consultation for the first five market appraisals we book in March 2018. www.frankharris.co.uk
Mark Scoging at A.W. Childs: With cautious projections still lurking, we have seen tenant demand continue to edge higher and Landlord instructions have continued on an upward trend. We have witnessed a ‘’bounce back’’ in rental prices and still remain very optimistic in the City of London’s future as we become closer to the UK’s exit from the EU.
Glen Cook: Good news for the rental market: We have seen a near 15% increase in rental values in the last 6 months, demand has picked up but the supply has dropped, a number of accidental landlords have now sold and so restricting rental stock levels hence driving up rental values. Demand remains strong and outstripping supply.
Tom O’Halloran at Thomas Michael: The lettings market is very buoyant at the moment and we’ve had a busy January and February. This may be, in part, due to a slower sales market with some prospective buyers taking a ‘wait and see approach’ and continuing as tenants. Well presented, refurbished flats are always in demand and flexibility on furnishing and reasonable requests from tenants is often key to a successful let. If you would like a rental appraisal or just a discussion on the lettings process I would be pleased to hear from you. www.thomasmichael.co.uk
Joe Davison at Scott City: The rental market in the Barbican and City area has maintained a very good level of demand, but at present has seen a low level of new stock. Scott City are working hard in order to gain new instructions in the Barbican area, as we have many keen clients looking for properties ranging from small studio flats, to the larger 3 bedrooms. If you are considering letting out your property, please get in touch and we can organise a free valuation. www.scottcity.london