Average Rents Paid by Tenants in Oxford rise to £2,490 per month

Back in the Spring, there was a surge in Oxford landlords buying buy to let property in Oxford as they tried to beat George Osborne’s new stamp duty changes which kicked in on the 1^st April 2016. To give you an idea of the sort of numbers we are talking about, below are the property statistics for sales either side of the deadline in OX2.

Jan 2016 – 42 properties sold

Feb 2016 – 27 properties sold

March 2016 – 91 properties sold

April 2016 – 19 properties sold

May 2016 – 23 properties sold

Normally, the number of sales in the Spring months is very similar, irrespective of the month. However, as one can see, this year was a completely different picture as landlords moved their purchases forward to beat the stamp duty increase. You would think that even with a basic knowledge of supply and demand economics, rents would be affected in a downwards direction?

However, there appears to be no apparent effect on the levels of rent being asked in Oxford - and more importantly achieved - and this direction of rents is not likely to reverse any time soon, particularly as legislation planned for 2017 might reduce rental stock and push property values higher. The decline of buy to let mortgage interest tax relief will make some properties lossmaking, forcing landlords to pass on costs to tenants in the form of higher rents just to stay afloat. Even those who can still operate may be deterred from making further investments, limiting the growth in available rental stock at a time of severe property shortage.

But it’s not all bad news for tenants. Whilst average rents in Oxford since 2005 have increased by 22.6%, inflation has been 38.5% over the same time frame, meaning Oxford tenants are 15.9% better off in real terms when it comes to their rent (which is a sizeable chunk of most people’s monthly household budgets)

Year	Average Rent in Oxford per month
2005	2030
2006	2077
2007	2123
2008	2193
2009	2227
2010	2196
2011	2249
2012	2300
2013	2334
2014	2369
2015	2421
2016	2490

I found it particularly interesting looking at the rent rises over the last five years in Oxford, as it was five years ago we started to see the very early green shoots of growth of the Oxford economy.  Following the Credit crunch (2011), rents in Oxford have risen by an average of 2.4% a year – fascinating don’t you think?

The view I am trying to portray is that while renting is often portrayed as the unfavorable alternative to home ownership, many young Oxford professionals like renting as it gives them flexibility in their life. Overall, tenants have had a good deal with below inflation increases in rents over recent years. As Government policy targets landlords financially, it is likely that there will be a period of higher rent increases across Oxford, as landlords off-set the additional costs being imposed on them.  The data suggests a small rebalancing between tenants and landlords is overdue, and can be accommodated without driving rent above the medium term inflation trend.