Housing front and centre in 2017 Budget, but what will it mean for Oxford?

The Budget has been announced and analysed, so far with relatively few unannounced ‘nasties’ having been found.  It is welcome that housing is receiving the attention it deserves, recognising: the challenge faced by first-time buyers; that too few new houses are being built; and, that renting is now a preferred alternative for many people.  But, are the Chancellor’s plans going to serve Oxford and the County well?

No Stamp duty for first-time buyer for the first £300,000 spent

Oxford is well known as having one of the largest gaps between average property price and average salary anywhere in the UK.  With one-bedroom apartments in central Oxford selling for £385,000 or more, even without stamp duty, most first-time buyers can’t afford to live in the City.  But places such as Littlemore, Greater Leys, parts of Marston and Barton do provide realistic opportunities, particularly where a shared ownership option is available.

But, the changes to stamp-duty do not benefit those looking for their second home, who need to vacate their starter homes to make way for first time buyers.  House building takes time, and consideration should be given to a tapered reduction in stamp duty benefitting 2^nd and 3^rd time buyers encouraging them to move.  Only then, would these measures really benefit Oxford’s market where 97% of sale transactions are within existing housing stock.

100,000 new homes for Oxfordshire

As part of plans to connect Cambridge and Oxford, one million homes are planned between these great University Cities.  Of those, 100,000 are expected in Oxfordshire.  Oxford must fight, and fight hard for the lion’s share of those new homes.  Without them, the local property market will remain supply constrained.  With Oxford Parkway train station, North Oxford – Kidlington, Marston and Wolvercote present significant opportunities to build with easy access to the City centre, and transport links to the Midlands and London.

A consultation on longer tenancies

The Chancellor announced a new consultation on how to encourage longer tenancies.  This will bring the total housing consultations to 16!  Oxford, like most places in the UK is experiencing a trend towards longer tenancies.  Once student tenancies are removed from the average tenancy length is between 24 and 30 months.  Longer tenancies benefit both landlord and tenant where each is satisfied with the other (the majority of tenancies).  This suggests to me that no consultation is required to stimulate a trend that is already occurring under current arrangements.

It is great that housing is getting the Government attention it deserves, but our local authorities must seize the day, facilitate the planning process and secure their fair share of the new funds.

A quarter of Oxford buy to let landlords to quit?

According to a survey of 1,000 buy to let investors by the Residential Landlords’ Association (RLA), around a quarter are saying they will quit the private rental sector because of tas changes planned for April.

The planned restrictions on claiming mortgage interest relief as a cost of business which will be introduced from April 2017 is undermining the financial viability of buy to let investments.

Regular readers will know that I have identified that Oxford requires some 6,800 new homes in the private rented sector over the next 9 years, and that the Government’s raid on buy to let landlord’s risks a period of great disruption for tenants if landlord’s turn to short-term holiday lets as an alternative, or if they sell their properties to owner-occupiers who can afford them. 

The impact could be a reduction in the supply of private rented properties in Oxford at the very time a further 6,800 are needed.  That could mean nearly 18,000 people being unable to live in Oxford the UK’s 8^th fastest growing City!

For how long can the Government focus solely on the availability of homes for owner-occupiers to purchase rather than all facets of supply – social housing, private rented homes and owner-occupied homes.  Each aspect of the housing mix needs developing, and undermining any one could have severe and unexpected consequences.