Well, the Brexit vote is now behind us and, contrary to the doom and gloom merchants, the sky has not fallen in – at least not yet.  Indeed this seems to be the case across the economy.  Retail sales and Manufacturing have not slumped – indeed quite the opposite according to the latest figures – and even the pound is beginning to recover despite a seemingly hard line being taken by Theresa May’s Cabinet.  Tales of the UK’s economic demise appear as if they may have been greatly exaggerated.

View from 2 bed triplex apartment in Willoughby House on sale at Scott City for £1,135,000

View from 2 bed triplex apartment in Willoughby House on sale at Scott City for £1,135,000

The Barbican is something of an always-in-demand micro-market so is perhaps less prone to serious price fluctuations than some other areas of London, or the country as a whole.  But despite dire predictions from the ‘Bremain’ supporting talking heads, there appears to have been relatively little effect on house prices and rentals across the country, apart from a short period of nervousness immediately following the vote result – which is hardly surprising given the extent of the ‘project fear’ campaign in the run up to the referendum.

In a digital interactive map published on the City AM website, though, there is the suggestion that prices in the EC2Y postcode may have fallen by around 2% – from a 1 July average price of  £1,228,400 to  £1,198,600 by mid-August, but in some cases that is represented by the froth coming off some over-the-top asking prices

According to a report from Nationwide, published on September 1st, average house prices across the UK increased by 0.6 per cent in August, taking the annual rate of growth to 5.6 per cent.

Commenting on the figures, Robert Gardner, Nationwide’s Chief Economist, said: “UK house prices increased by 0.6% in August, resulting in a slight pick up in the annual rate of house price growth to 5.6%, from 5.2% in July, although this remains within the 3- 6% range prevailing since early 2015.

 “The pick up in price growth is somewhat at odds with signs that housing market activity has slowed in recent months. New buyer enquiries have softened as a result of the introduction of additional stamp duty on second homes in April and the uncertainty surrounding the EU referendum. The number of mortgages approved for house purchase fell to an eighteen-month low in July.

 “However, the decline in demand appears to have been matched by weakness on the supply side of the market. Surveyors report that instructions to sell have also declined and the stock of properties on the market remains close to thirty-year lows. This helps to explain why the pace of house price growth has remained broadly stable.”

However, Nationwide still sees the outlook for the housing market as ‘clouded’ “What happens next on the demand side will be determined, to a large extent, by the outlook for the labour market and confidence amongst prospective buyers.

“It is encouraging that the unemployment rate remained at a ten-year low in the three months to June, though labour market trends tend to lag developments in the wider economy. It is also positive that retail sales increased at a healthy rate in July, up almost 6% compared to the previous year, even though consumer confidence fell sharply during the month.

“Most forecasters, including the Bank of England, expect the economy to show little growth over the remainder of the year. Indeed, these concerns prompted the Bank’s Monetary Policy Committee (MPC) to implement a range of stimulus measures at the start of August, which will provide support to economic activity and the housing market. Monetary policy measures will provide some support for households and the housing market

“The MPC’s decision to lower UK interest rates from 0.5% to a new low of 0.25% will provide an immediate benefit to many mortgage borrowers, though for most the boost will be fairly modest. “The proportion of mortgage balances on variable rate products is lower than average at present (c.45% compared to an average of around 60% since 2001) and the typical saving from a 0.25% cut in interest rates is around £15 per month.

 “The MPC’s stimulus measures will also provide indirect support to the housing market, and not just by boosting wider economic activity. For example, the decision to purchase an additional £60 billion of UK government bonds will put downward pressure on long term interest rates which will, in turn, help to lower the cost of fixed rate mortgages, which have already declined to new all-time lows.

“The creation of the new Term Funding Scheme is also important, as it means that lenders will have guaranteed access to low cost funding from the Bank of England, which should help ensure the supply of credit is maintained.”

Post Brexit – first-time buyers are back

First-time buyers accounted for more than a third of purchases to dominate the property market in Prime London in Q2, as buy-to-let investor activity fell from Q1, according to another London-specific survey from estate agent Marsh & Parsons’ latest London Property Monitor.

Having represented 22% of the Prime London market in Q1 2016, first-time buyers grew their share to 34%, making them the most common buyer type. This burgeoning market share was helped by decreased competition from property investors. Having rushed to beat the additional Stamp Duty levy in the first quarter before April’s deadline, landlord interest cooled in Q2 to just 13% of sales, down from an uncharacteristically high 36% in Q1 with investors hoping to purchase prior to the Stamp Duty levy.

As well as representing encouraging news for prospective purchasers, the rise in first-time buyer numbers has also had a positive knock-on effect further up the property chain. New lifeblood on the first rung has freed up logjams meaning increased second-stepper activity – 22% of transactions in Prime London compared to 9% at the start of the year.

First-time buyers have not had things all their own way. They have cornered the market across all of Prime London as a whole boosted by transactions slightly further away from the heart of town, investors are still prominent in Prime Central London, accounting for 31% of sales in Q2.

David Brown, CEO of Marsh & Parsons, comments: “We’re often surrounded by stories of what a raw deal first-time buyers get – particularly in the capital – so it was encouraging to see them dominate the market in the second quarter of the year. For all the hurdles that stand in the way of prospective purchasers there are plenty of other positive factors such as historically low interest rates to help soften the blow.

The EU referendum result at the very end of the quarter came too late to impact the overall trends seen, but after the initial panic in the days immediately following, it’s been very much a case of business as usual ever since. Property investor activity is unlikely to remain so low in Q3 – especially with the currency exchange situation making London property extremely attractive for landlords from overseas.”    

Prime numbers

According to Marsh & Parsons, the rate of quarterly house price growth in Prime London has cooled somewhat in the second quarter of the year, with a 0.3% decrease from the opening three months of the year. Outer Prime London prevented this fall being more pronounced with a 0.4% quarterly uptick.

The annual picture was more positive, with a 1.3% increase in average property prices in Prime London since the second quarter of 2015, rising to 2.7% in Outer Prime London. This has been driven by particularly strong growth in certain south London areas.   These are lower figures than the Nationwide survey would suggest.

In terms of the types of properties experiencing the keenest value growth, larger homes witnessed the strongest rises as buyers with families and those seeking extra space dominated the market. Four-bedroom homes saw their average values rise by 1% on a quarterly basis across Prime London, with such properties excelling in Outer Prime London where they enjoyed a 2.8% uptick.

However, on an annual basis it was one-bedroom properties that were the best performers, appreciating by 2.7% since Q2 2015 across Prime London, and by as much as 5.4% in the outer ring.

Looking at how purchases are funded, 61% of Prime London properties are bought with a mortgage and 39% are acquired with cash. This split is precisely reversed in the very heart of the capital where 61% of transactions are cash purchases, showing that cash still speaks loudest in the most prestigious postcodes.

David Brown concluded: “With property investors frontloading their transactions into the first quarter of the year, activity was always likely to take a slight step back in the second quarter and so it transpired. Q3 is unlikely to see a marked uptick in values or transactions as we enter a traditionally slower season that sees individuals more preoccupied with holidays than houses, but is reassuring that the UK’s decision to leave the EU isn’t having the immediately negative impact that some doom-mongers predicted. Indeed, with the Bank of England reducing interest rates to a new historic low, mortgage finance will continue to be accessible, with pricing as attractive as it ever has been.“  

 These findings by City AM, Nationwide and Marsh & Parsons, although in some cases contradictory, seem to be echoed at least in part by some of the Barbican-focused estate agents.  It is almost certainly too early to tell if there has been any long term damage to Barbican property values, but in general it seems that any adverse effects have been small with some of the benefits of the Brexit vote balancing some of the negatives.  We will know more by the next issue of Barbican Life.

By all accounts, rentals and lettings business in the Barbican remains strong though.



Glen Cook at Hamilton Brooks: Post Brexit…….During the first couple weeks we were fielding a fair number of calls from worried sellers and buyers, but little happened, the vast majority of buyers took the long term view and quite rightly so. But now, nearly 8 weeks later it’s as if nothing had happened ( which of course it didn’t).  We have a healthy buyer demand bearing in mind we are at the height of holiday season, this week we agreed 3 sales in the Barbican, not bad for any normal August. It seems sense has prevailed. We now have a severe lack of sellers at all levels.  www.hamiltonbrooks.co.uk

Tina Evans at Frank Harris: Since the Brexit vote we have had a steady flow of new applicants, but the number of buyers registering is lower than previous years, buyers are looking for price reductions that reflect the numbers suggested by the media. It IS a buyers market currently.  The real successes we have had recently have been with organising “one off” viewings on properties, sellers are happy for a small selection of filtered proceedable (i.e.nothing to sell and cash in the bank) buyers to view their property and buyers feel they are seeing stock “off market” which they are prepared to pay a full price for to secure before it goes on to the market.  Our in-house mortgage brokers report an increase in mortgage applications in the last two months due to the historic low interest rates being offered. We do have buyers for low floor tower flats currently. www.frankharris.co.uk

Nick Scott at Scott City:  After the shock of the EU vote to leave there was immediate uncertainty in the City property market. Continued low interest rates and a weak pound have encouraged overseas buyers into the market. I’m pleased to report an increase in activity in the last couple of weeks which is encouraging as this is still the traditional August holiday season. The supply of Barbican property has also increased slightly in the last month so increased activity has followed, our confidence in the market has improved since June and hopefully the prospects are good for the Autumn. www.scottcity.co.uk


Robert Sayers at Frank Harris: Following a very brief and predictable post-Brexit lull in the rental market in both the Barbican and City area generally, it has now become a case of “business as usual” as the initial effects of the controversial EU referendum have very much slipped into the rear view mirror. Indeed, there is both a very healthy supply and demand for property in the Barbican, and this is expected to last well into the Autumn months, and beyond, with a variety of different styles and sizes of apartments attracting equal interest across the board. The Barbican Estate continues to be an extremely popular, desirable and unique place to live.

Glen Cook: Rental demand has rocketed we are letting pretty much all the apartments we are getting at very healthy levels, we had 4 or 5 new buy to let flats in the Barbican which is pretty unusual but they are all letting.


Rare Lauderdale Tower penthouse apartment for sale by Hamilton Brooks at £3.95 million.


3 double bed apartment on 14th Floor of Blake Tower for sale by Frank Harris at £1,750.000


View from 2 bed triplex apartment in Willoughby House on sale at Scott City for £1,135,000