Flatwatch Christmas – Prices in a bubble – perhaps not!

By all accounts the sales market for Barbican and local area properties has been strong through the third quarter, although may now be beginning to slow down ahead of Christmas. However the price improvement may not be affecting all sizes of property equally.  The changes to stamp duty earlier in the year have particularly impacted the high end plus £1.5 million properties – which thus includes virtually all the higher up tower block flats and other larger units such as Lambert Jones Mews, Wallside and The Postern.  Indeed it may even put a cap on the pricing of some of the best two-beds on the Estate given the price levels Barbican properties have been reaching of late.

Now the Chancellor’s Autumn Statement has added a further 3 per cent stamp-duty premium on buy-to-let and second-home purchases which could affect sales and sale prices too, although one suspects that the number of potential buyers waiting in the wings, if one is to believe all the estate agents seeking properties to sell, would mean there’s still plenty of demand over and above buy-to-let and second home purchases.  The Daily Telegraph comments that some predict, as a consequence of the Chancellor’s latest money raising efforts, a flurry of activity as buyers seek to secure property deals before the move takes effect in April, followed by a lull. On the other hand, people may hesitate to sell before they have bought elsewhere — having two properties while you search for the perfect downsizing pad or renovate a new family home could prove costly under the proposed new stamp duty scheme.

But, as always, there are some very mixed views on where property prices are headed.  A recent report from Swiss bank UBS suggested that London House prices are in a bubble and, related to average income levels are among the highest in the world.  It sees this as unsustainable thus predicting a housing price crash ahead.  However this relies hugely on the estimate of average wages and critics of the report suggest that the UBS figures were based on an average wage of £29,57.50 for a skilled service worker whereas ONS data puts the average inner London wage 16.5% higher than the UBS figure which makes a big difference to the calculation.  And given the price variations right across the capital from borough to borough, some see the UBS figures as somewhat irrelevant anyway.

As far as type of property is concerned, a recent report from estate agents Marsh & Parsons suggests that one-bedroom homes are now the most sought-after in Prime London, either as a starter home, buy-to-let or pied-a-terre, and have witnessed the largest increases in price in the past quarter. It says average prices for a one-bedroom property have risen 3.5% since Q2 2015, or £21,240 in cash terms. The trend is even more pronounced in Prime Central areas, with smaller one-bedroom properties appreciating in value by 5.9% in three months.

BARBICAN SPECIALIST ESTATE AGENTS’ COMMENTS

SALES

Nick Scott of Scott City: Activity in the sales market has been slower this autumn for two reasons, firstly a lack of Barbican stock although we are just seeing the signs of a little more property coming available and secondly the changes in stamp duty which were announced earlier this year have had an effect on sales between £1 million and £2 million. With clients being more aware of costs we are seeing higher demand for properties in good condition and situated in the better locations. The increased activity that we expected after the election in May didn’t materialise so we are seeing a more steady market without the craziness we experienced last year. As we approach 2016 we expect growth to continue but maybe not as steeply as we have seen over the past few years. www.scottcity.co.uk

Matt Gibberd of The Modern House: A friend of mine, who owns a chain of estate agencies in central London, recently described the market as “treacly”. He meant sticky rather than sweet. From our side we are seeing huge demand for properties under £1m, with sealed bids commonplace, but the upper end of the market remains a battle. www.themodernhouse.net

Tina Evans at Frank Harris: We are beginning to see the Christmas slowdown with buyers taking their time to make a decision. We still have a very long list of potential buyers who are frustrated by the lack of stock available, if you are considering selling this is actually a very good time with many of our buyers working locally and businesses generally slowing down they have time to view property.

The Blake Tower official launch and show flat opened on the 19th November, if any residents would like a personal tour please do let me know.

We would like to wish all the Barbican residents a Very Happy Christmas and a happy and healthy 2016.  From all the Team at Frank Harris and Company.  www.frankharris.co.uk

Glen Cook at Hamilton Brooks: This quarter is pretty much a mirror image of last September 2014, we have a reasonably healthy demand across all price bands, but within those prices bands you can have a surge in demand for certain types of units, almost a micro market within a micro market.  Thus you need to consult an expert who knows apartment types to decipher which units are getting the demand and which ones are not and price accordingly, I have seen easily £100,000 difference between agents’ valuations, so be careful if you are a Solicitor, Executor or Law Firm giving out instructions.  www.hamiltonbrooks.co.uk

Lisa Mason at Hurford Salvi Carr: We have a number of proceedable Barbican buyers currently registered looking to buy and have noticed that in the last year many of these are coming from outside the area.  The new residential developments and regeneration taking place around The City have certainly helped underpin Barbican values, introducing a strong International buying public, unseen before in The Barbican.  With the much anticipated opening of Crossrail playing a huge part in the Barbican’s future, buyers are motivated and keen, however there remains a shortage of good 1 and 2 bedroom apartment available. With the opening of our Aldgate, Islington and Shoreditch offices, we are able to offer Barbican sellers a much wider applicant database, working in conjunction with our Clerkenwell and City office which has been successfully selling in the Barbican for 20 years. www.hurford-salvi-carr.co.uk

Alex Childs of AW Childs: We’ve found that buyers’ confidence this quarter has led to properties with realistic pricing being in high demand, leaving overpriced stock on the market for months, which is very unusual for the Barbican. We have also seen a surge of valuations within the estate, which will be coming to the market in early 2016. Good news for sellers, as it’s unlikely that the prices for 2016 will be affected due the demand for specific style of flats – in particular type 20s, tower flats and large style studios.  If you’re thinking of selling in the New Year, our advice is to get ahead of the competition and prepare early to get the best price for your home. We would like to thank the Barbican residents for the continued support, look forward to successful 2016. www.awchilds.co.uk

LETTINGS

Joe Davison at Scott City: The Rental Market in and around the Barbican is still seeing a good level of demand, with Studio and One bedrooms proving to be the most popular in terms of enquiry levels. With Christmas approaching, we would expect a slightly quieter period but so far this does not seem to be the case, especially with Barbican properties. The level of enquires are still High at this current time, with the only problem being not enough stock in the area

Mark Scoging of AW Childs:  We have seen strong demand for rental properties in the Barbican and values have increased over the past three months. This means that undervalued properties now need to be adjusted to current market rates to prevent landlords losing rent.

Glen Cook: We have seen new entrants of rental stock from Roman House to Heron Tower and to be honest demand for those is from a different sector of the market than the demand for the Barbican –  those that would take one would not take the other. So demand is healthy for well-presented Barbican flats, as always.

Tina Evans: With the West End Christmas lights now in full illumination, the lights are beginning to dim slowly on the City rental market, which is a traditional occurrence for this time of year.  However, with so many prospective tenants holding off their property search until January, now is the perfect time to take full advantage, if you are looking for a property to rent for the New Year.

As the nights draw in and the temperatures begin to decrease, it’s well worth remembering a few handy tips to bear in mind when it comes vacant properties this winter.   Always keep the heating switched on: There is nothing worse for prospective tenants than turning up at a property to view a dark, lonely apartment that is also freezing cold.   Always make sure the windows are regularly opened: Damp and condensation can occur regularly in properties at this time of year, as windows are usually closed at all times to combat the cold. However, this can lead to condensation and damp patches occurring if your property is not ventilated sufficiently.