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There are many mixed messages in the media about what is happening to property prices, but the sensible viewpoint is probably wait for the dust to settle after the changes in second home stamp duty – which boosted sales in the first quarter, but saw them drop away sharply in April – and probably until after the Brexit vote too.  One can see from the Estate Agents’ Comments below that there has certainly been a drop-off in sales, but the most significant cause of this was the rush to complete a second home, or buy-to-let purchase ahead of the stamp duty deadline.  There certainly seems to be more unsold properties on the market since April 1st.

But stamp duty per se is unlikely to affect price patterns long term.  For those buying a primary home, as long as they don’t plan to keep another one, stamp duty has not changed from the rates set in 2014.

For those who are not aware, the new stamp duty thresholds for a first or primary home are:


Property or lease premium or transfer value Rate Second Home
Up to £125,000 Zero 3%
The next £125,000 (the portion from £125,001 to £250,000) 2% 5%
The next £675,000 (the portion from £250,001 to £925,000) 5% 8%
The next £575,000 (the portion from £925,001 to £1.5 million) 10% 13%
The remaining amount (the portion above £1.5 million) 12% 15%

In other words if you are buying a first home for £950,000 the tax charge would be zero on the first £125,000, 2% on the next £125,000 (£2,500), 5% on the next £675,000 (£33,750) and 10% on the final £25,000 (£2,500).  I.E. a total of £38,750 – equivalent to an overall rate of 4.08%.  This almost around the same you would have paid before December 2014 on a similarly priced property where there would have been a flat rate of 4% on the total purchase price – equal to £38,000.  Of course the same property would have cost a little less a couple of years ago!

So for a buyer of a new main home in this price bracket there are virtually no changes in stamp duty at all.  However if you are buying as a second home or for buy-to-let there is a 3% surcharge at all levels so the equivalent duty on our £950,000 flat would be £67,250 if I’ve got my calculations right – an increase of £28,500.  Well worth accelerating the purchase to get it in before the April increase.

However most second home or buy-to-let purchases in the Barbican would probably be for studios or small one beds.  On a £500,000 studio – yes that’s around the level they go for now – you would pay £30,000 stamp duty on the purchase as a second home – an overall rate of 6%.  If you were buying the same property as a first time buyer stamp duty would be half that amount – or a rate of 3%.  Even a difference of £15,000 would have been worth trying to complete before April.

What is perhaps a little disturbing for buyers and sellers (and the Estate Agents) is the degree by which sales appear to have dropped off even though the stamp duty for the purchase of a main home is actually unchanged.  Lots of the statistics being bandied about are of course already out of date by the time they are released.  We do see almost unanimous views from the agents specialising in Barbican sales that they have seen a sharpish downturn in activity post April 1st and virtually all see the Brexit referendum as the potential turn-around point assuming of course there is a Remain vote and effectively the status quo resumes.  If the vote goes the other way, although the polls and the bookies seem to see this as unlikely, then all bets are off.

None of the Agents are yet reporting any fall-off in prices, although one suspects that could become a natural outcome of the sales downturn – but again sellers may be unwilling to reduce asking prices ahead of the referendum.  A collective sigh of relief amongst the likely City buyers if the Remain vote comes in as expected could lead to prices returning to the upwards path.

But the polls are divergent with online ones suggesting 50:50 – or even a Leave majority.  More conventional telephone polling is suggesting a strong remain majority.  But the two options are pitting the head against the heart in many cases and one has a sneaking suspicion that some of those who say they are supporting the Remain camp may be loath to admit that they are actually potential closet Leave voters.  We shall see, but the final result could be closer than many may think.

Rentals may just be showing a sign of rising and more availability.  As buy-to-let properties are now becoming ever more expensive this should filter down into rents.





Tina Evans of Frank Harris: We have definitely seen a slowdown in sales since the beginning of April 2016.  The increase in Stamp Duty for second home purchases does seem to be onerous enough to have taken a number of potential buyers out of the market place and add to that the uncertainty of the Brexit vote it has made it difficult for buyers to want to commit until they know the outcome.


We have sold some amazing flats this year (some off market) plus we have two houses for sale which are very rare.  Blake Tower is proving popular with residents already on the estate with completion expected within the next 12 months, if you would like to book a personal tour please do contact us.


Glen Cook at Hamilton Brooks:  If I hear the word Brexit again it won’t be too soon. As mentioned previously the first quarter of this year was amazing, plenty of sellers plenty of buyers.  Wind forward a few weeks and both have disappeared.  Brexit & Stamp Duty are to blame. If we fast forward to 24 June I think we will return to a healthier market.  The extra stamp duty costs will have bedded in( still painful but begrudgingly accepted) and as the world will not end, sellers and buyers in equal measure we think will return. Bring on 24 June.

Alex Childs at AW Childs: We have noticed an increase in buyer activity towards the end of this quarter, having agreed a number of sales in the area. However the number of buyers wanting to commit to purchase has been low, potentially due to concerns towards the economy and Brexit. We are hoping for this to change entering the summer months. There is still a large amount of property currently available for sale in the City and only properties marketed at the right value are selling. If you find your property has been on the market for some time and would like a local expert opinion, please feel free to contact us for honest and straightforward advice.

Nick Scott at Scott City: January and February were amazing for sales with every buyer trying to beat the stamp duty increase for second homes by the 1st April. This rush caused a slight distortion in the market and has led to less activity than normal for this time of year.  Having said that good quality correctly priced apartments are still selling and the demand for the Barbican continues to be there.


Nick Scott: We’re pleased to report strong demand for Barbican rental property although rental values have not increased greatly in the last 12 months we are seeing good quality tenants wishing to live in the Barbican. Scott City are marketing a very nice two bedroom type 21 in Defoe House, furnished with great views over the gardens for £540 per week.

Mark Scoging at AW Childs: The rental market has been buzzing, especially over the last month as we’ve entered spring. We’ve noticed a lot more flats in and around the Barbican coming to the market across all price ranges. We’ve seen another increase in rental prices, in particular rents on new tenancies have continued to grow at a remarkably consistent rate.