Oxford property just keeps delivering

Regular and long-standing readers will know that I like to explore the ‘inside story’ of the Oxford property market, digging beneath the headlines to understand the market at a more ‘granular’ level.

Oxford headlines based on land registry data (the one source of the truth based on completed transactions).  In January 2018, Oxford house prices were 5% higher over the last 12 months.  So Oxford didn’t follow London in the doldrums as some (a hem…including me) predicted could happen in 2017.  But, the number of completed transactions was down 21% with just 2,618 house sales being completed.  The average price achieved was £422,055 meaning Oxford and Cambridge were the only two UK cities other than London to have an average price beginning with a ‘4’.  Oxford remains the least affordable UK city when average house price is compared to average income earned in the City.

How does Oxford’s property market vary by post code?  As can be seen from the table below things vary quite significantly.

Central OX1 experienced the largest fall in transaction volumes, down a quarter, with OX4 down just 11%.  But OX5 average price was up just 1% when OX2 was up 11%.  The spread on average price was £233,742 with OX2 dragging-up the average.  OX4 saw the highest number of completed transactions. 

But post code areas are still too large to get a sufficiently granular understanding of what’s going on out there.  And, it is always good policy to look at data from different sources.  So let’s look at some of Oxford’s key areas using data from Rightmove.  This data is based on properties sold on Rightmove rather than the whole market.

The table [or graph] below shows average price achieved for 14 of Oxford’s best known residential areas, and also how those averages have changed compared to the prior 12-month period.  Straight away it can be seen that each post code can hide enormous variation in average values and in the change over a 12-month period.  Prices in OX1 have changed by between - 8% in Kennington to +15% on Grandpont.  The only consistently positive shift in prices was seen in OX4 with Rose Hill, Littlemore and Cowley each in positive territory.  The worst performing sub-market was Kennington and the best performing Grandpont, closely followed by Marston, Rose Hill and Littlemore.  All strong owner-occupier markets offering a good range of affordable homes.

So what about the rental market I hear landlord readers ask?  Across Oxford average rents rose by just 1% compared the prior year averaging £1,207 per calendar month.  But this too hides some variation between property type.  Detached home rents rose 3.1%; semi-detached 3.2%; terraced 3.7%; and, flats 0.16%.  So it can be seen that Oxford apartments which were over 45% of all tenancies, were impacted more than other property types.  So why was that?  My own opinion is that the negativity surrounding Brexit adversely impacted demand from foreign nationals wanting to study in Oxford, undermining demand for central-Oxford apartments.

It’s millennials who are driving demand for Oxford rentals, at least that’s the common narrative.  But in fact, the average age of an Oxford tenant is 33.  50% of all demand comes from people over the age of 29 and 22% from people over the age of 39.  So in reality the demand for rental properties is shifting to include young families who need 3 and 4 bedroom properties in areas with schools, easy access to schools and good road and rail links.