2016 has certainly been eventful! Oxford found itself at odds with the national
vote for Brexit, Donald Trump’s election-win is causing many to fear for the
future and…the Bake Off moved to Channel 4.
At least the Oxford property market provided some certainty.
Last month, Oxford property values rose by 0.31%,
leaving them, year on year 7.1% higher, whilst Oxford asking prices are down 2.0%
month on month. As I predicted, Oxford property has recovered well after a
summer lull and, according to Zoopla, the average value of an Oxford home is
now £509,000.
Oxford asking prices continue to hold up well,
up 4.7% year on year, despite the pre-Christmas fall.
In Oxford, the volume of property sales has
fallen slightly, suggesting a slowing market.
But, it’s interesting to take note of a recent survey by the Royal Institution
of Chartered Surveyors (RICS), stating new buyer enquiries and new instructions
are falling at the same rate, suggesting limited downward pressure on property
values.
Across the UK, property
values are generally rising more slowly.
Rather than a Brexit effect, I believe this is mostly related to affordability. The gap
between average income and average property price is widely seen as a
natural correction factor for house prices, and this remains a critical issue
in Oxford - one of the least affordable places in the UK to buy a home.
On the other
hand, interest rates remain at a record low of 0.25%.
The cut in interest rates in the late summer was the medicine for uncertainty,
but, due to stricter lending criteria, affordability trumps low interest rates
for many first-time buyers, benefitting older more affluent buyers
disproportionately, with continuing stagnation at the bottom of the market.
So, what will happen in 2017 in the Oxford
property market?
Some say until we know what type of exit the
UK will make from the EU it is hard to evaluate with certainty. I believe, the
whole Brexit issue is a sideshow to the main issue in the Oxford which is
demand for homes outstripping the supply of houses. Oxford ranks 5th nationally for
gross value-add and 8th nationally for population growth. 32% of Oxford’s population is aged between 18
and 39 years, and 30% of the population live in private rented accommodation. Neither house building nor availability of rental
homes is keeping pace with demand, and I believe this will worsen during
2017. Whilst it is great news for Oxford
that it will become better connected to Cambridge (bridging the two great knowledge
economies in England), it will only increase demand to live and work in our
great City. Instead of bashing landlords
in the mistaken belief they are helping tenants, Government needs to go the
hard-yards – building 3 times as many new houses AND stimulating new rental
supply across Oxford’s post codes.
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