Lawrence Williams’ review of what’s happening in the Barbican’s property sales and lettings.
Contrary to early predictions, the coronavirus impact on property prices virtually around the country has seen some good growth, rather than the collapse predicted by some property analysts. There is the impression, though, that prices may now have stabilised and might even be beginning to come down a little. There are certainly indications that vendors are not necessarily receiving their initial asking prices and may have to accept a discount on these to achieve a sale – particularly now the stamp duty discounts have effectively ended.
There had been a bit of an artificial property price boom brought on by the Chancellor’s stamp duty discounts. There is the likelihood that some of the price falls since this has now ended will have been compensation for the increase in stamp duty a purchaser will have had to pay once the holiday period ended.
While general price rises across the UK as a whole appear to have been increasingly evident, it does appear that parts of the capital city have been left behind a little. The rest of the country has been playing catch up, probably assisted by a trend for some office workers to move out from city centres as working from home opportunities – even if only part time – mean that suburban or country properties, with private gardens, become more attractive. – particularly to family units. However, one suspects this may be a passing phase as businesses return to near normal, Even so, enclaves like the Barbican, with its private gardens and lakes becomes hugely attractive and may well fare better than some other London areas.
It is notable though that in their comments on the state of the Barbican flat sales market, most of the local estate agents are fairly circumspect in their assessments. Sales have not collapsed, as some had feared, and do seem to have been picking up, but perhaps not to the extent suggested by some of the over-hyped media coverage. On the positive side, lettings business does seem to be strengthening after something of a hiatus.
In its regular half-year market research report, local Estate Agent Hurford Salvi Carr notes that in the early months of 2021, lockdown and social distancing were deterrents for owners considering a sale while weak pricing initially dampened any enthusiasm for selling. At the same time demand across central London had been affected by the global shutdown of international business and leisure travel due to the pandemic and this will have impinged negatively on the Barbican market.
The Chancellor’s temporary stamp duty concessions, though, do seem to have at least re-stimulated the market and there was decent evidence of price recovery/growth as a result. There has been a bit of a tailing off as the concessions have ended, but we suspect the market will pick up again once the market gets used to a full stamp duty level.
Back to Hurford Salvi Carr’s analysis, affordability remains a major issue for the vast majority of Londoners and the stamp duty burden is heavy again for high priced homes among which most Barbican apartments fall. However, with house prices rising sharply in so many other parts of the country, Central London is again an interesting proposition for investors focused on long term capital growth and a more realistic proposition for a larger pool of owner occupiers, even first time buyers, especially if they are in the market for one bed properties.
One of the key economic outcomes of the pandemic is that high paid workers have accumulated capital while their opportunities to spend have been severely curtailed. There is a view that the pied a terre will have a resurgence in popularity once London’s office workers return to their desks, at least for those who relocated their home base further afield over the past year. Barbican properties have long been closely associated with this market sector. Swings and roundabouts!
There may have been a small move out of city centres to more verdant pastures in the outskirts and the countryside, but London property sales seem to be holding up well in good locations and flats are very much the preferred type of residential property purchased. Research by Warwick Estates has shown that 47% of all London property sales are for flats. In the City of London the proportion will be far higher due to the lack of houses for sale. The Barbican is an ideal location given its excellent transport links – soon to be expanded when the much-delayed Elizabeth Line (Crossrail) opens in 2023 – its central location and great ambience.
The latest Rightmove property index just released shows that across the country as a whole:
- There have been new record highs recorded in the price of property coming to market in the mass-market sectors.
- There has been some cooling of the upper-end sector, with buyers no longer making larger stamp duty savings.
- The overall result is that the national average has fallen by 0.3% in the past month, the first price drop recorded in 2021.
- Buyer demand remains strong, suggesting an Autumn bounce in prices and seller activity:
- Demand stats for the first week in August are up quite substantially across the market throughout the country.
- However, Marc von Grundherr of Benham & Reeves estate agents comments that London continues to trail the rest of the UK as a result of a drastically different market recovery timeline.
While other regions have seen prices accelerate pretty much since the start of the stamp duty holiday, he notes that demand across the London market has stuttered due to travel restrictions dampening foreign buyer appetites and remote working impacting domestic demand.
The London property market, though, is really a multitude of micro-markets reacting individually to super-local influences. The Barbican should score highly in this respect.
With homes selling faster than ever, there’s a strong incentive for owners to come to market with “sell before you buy” proving the best tactic for many to secure their next home in this fast-moving market.
Observant readers will have noted something of a rebranding exercise at Barbican specialist estate agent Frank Harris following its acquisition by Dexters. There is no name change, but corporate colours in their promotional material have changed and there has been an office refurb. See News Review section of this issue for more information.
LOCAL ESTATE AGENTS’ COMMENTS
Glen Cook at Hamilton Brooks: The market fired back to life at the end of May, due to a a combination of vaccine double jabs and the return of younger City workers from isolation. June was frantic and even after the withdrawal of the Stamp Duty discount it was still busy with offers being accepted at realistic levels. As seems to be tradition, and probably even more so this year, the summer holiday period intervened and I think the during the last two weeks of July and beginning of August most of the City were in Cornwall/Devon/Dorset/Norfolk/Suffolk/Wales, the braver ones in the Mediterranean. Without being a doom sayer, September and the ‘real’ return to the office is now upon us and we expect activity to peak in readiness. Whether it’s a flat for 1/2/3/4 or even 5 days a week to avoid the commute, or future crisis, and/or for general investment as a family asset, I expect the demand for a Barbican apartment to remain strong. www.hamiltonbrooks.co.uk
Marco Fugaccia at Hurford Salvi Carr: With workers returning, albeit slowly to their offices, we have seen a renewed and increased level of applicant registrations for Barbican properties and have secured a number of “off market” transactions from motivated buyers. Entering the Autumn semester with more easing of restrictions and lockdown we expect a renewed level of interest and are now in need of more Barbican instructions. www.hurford-salvi-carr.co.uk
Nick Scott at Scott City: With restrictions being lifted and the epidemic now under control there has been a marked improvement in footfall in the City, although there are positive signs buyers are still being cautious. The City is generally busier, we feel September will be the month confidence returns to the market. If you’re thinking of selling please do not hesitate to contact us for a no obligation valuation of your property. www.scottcity.co.uk
Tina Evans at Frank Harris: The first half of 2021 has been our busiest in terms of sales for some years, i do think the saving on Stamp Duty assisted a little but i also think buyers are committing when they see good value. We have sold every type of flat and have very low stock levels on the Barbican estate, so if you are considering selling now would be the time to call me for an up to date appraisal. www.frankharris.co.uk
Nicola Lee at Nicola Lee Ltd: The Barbican is back! Its popularity has returned but there has been a shift in the residents cycle. Some secondary home owners after many years, have decided that the time is right to sell after having not been able to visit the Barbican for the past 18 months. I feel residents who recently relocated from the city will return as new secondary home owners. There is also renewed interest from families looking to buy in the Barbican to enjoy all of its benefits. Prices remain stable and reasonable offers are being accepted. The future looks Barbican bright. www.nicolalee.co.uk
Glen Cook: There has been a severe lack of availability. Most flats that come on go within days. There seems to be very high demand.
Marco Fugaccia: The rental sector which is seeing a surge in demand is picking up nicely and has almost returned to pre Covid levels.
Nick Scott: Demand for the City and especially Barbican rental property is very good. Rental values are showing a sign of an increase with the footfall and confidence slowly returning to the City. We have a good selection of studio, one and two bedroom flats available
Lindsay Lee at Nicola Lee Ltd: Lettings were slow to start but are now back on track. In spring it was evident that tenants were looking to rent in August/September when workers and students return to the city. Rental values have increased since last year. As always, presentation is the key to finding a good tenant faster.