“Oxford house prices are stagnating” “Oxford homes least affordable in the
UK” “The house price bubble is set to
burst” “Housing Armageddon”. Just a flavour of the typical narrative of
headlines in the printed and digital media daily. Yes, it seems we Brits are completely
obsessed with property, especially when the news is dire!
Given that I am in the business of writing about Oxford’s
property market, I thought I’d do a little research to establish some facts and
to share them with you.
Hometrack has recently updated its UK Cities house price
index with data to December 2017, so it is a good time to take a look and consider
the facts.
In general UK citizens feel that they understand property it
feels as if it is in our national DNA.
And yet, so many people seem to react to short-term trends, changing
their investment decisions because of the headlines they read.
According to Hometrack, an average Oxford property is now
worth £425,600, at a time when an average London home is worth £488,300. So, an average Oxford property is now worth
87% of an average London property. Only
Cambridge gets close to Oxford and London with an average house value of
£404,300. But London prices have been
falling so surely Oxford will suffer a similar fate? Well the truth is no-one knows! Towards the
end of last year Oxford properties did dip slightly according to Hometrack, but
across the 12 months to December 2017 Land Registry data shows Oxford
properties sold for values 6% up on the previous 12 months. It is also apparent that house prices have
performed better than predicted during January.
We are often told that investment in property should be
long-term, but does the long-term data support that assertion? Below is an analysis that shows Oxford house
prices (in Green) vs UK house prices (in Brown).
Oxford vs UK House Prices
From the graphic it can be seen that the UK house price
index had a positive consistent growth curve over the period from 1998, to 2008
after which it had a steep dip during 2009/10 with a progressive recovery to
the end of 2017 as which point prices had recovered to their 2007 highs. In comparison, since 1998 Oxford property has
consistently out-performed the UK average, following a steeper growth curve, experiencing
a more dramatic short-term fall during 2008/9, since when, it’s recovery has
been significantly steeper recovering 2009/10 losses during 2012/13.
Oxford vs London House Prices
So how has Oxford done compared to London? Well the analysis above shows how closely
Oxford (green) typically tracks the London market (Brown). With a gap in average values opening since
2013 as London out-performed the wider UK market because wage growth recovered
more strongly and foreign investment drove the market forward.
And, let’s not forget the rivalry with Cambridge. How does Oxford compare with Cambridge? The analysis below is also notable for the
close tracking of Oxford (dark green) and Cambridge property (teal) prices,
demonstrating that both Cities benefit from their world-renowned Universities,
their proximity to London and their long-term investment in the knowledge-based
services sector.
Oxford vs Cambridge House Prices
What these analyses really show is that property is a reliable
long-term investment, and that property owners should not be blown off course
by short-term fluctuations and alarming headlines. Even a multi-generational event like the
credit crunch, which had a profound effect on property for 12 to 24 months, is
now a matter of history with the long-term trend of growth having been restored.
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