Oxford Homeowners Are Only Moving Every 18 Years (part 2)

In the credit crunch of 2008/9 the rate of home moving plunged to its then lowest level ever. In 2008 and 2009 the rate at which a typical house would change hands slumped to only once every 17.5 and 15.4 years respectively.

The biggest reason being that confidence was low and many homeowners didn’t want to sell their home as Oxford property prices plunged after the onset of the financial crisis. Between 2013 and 2015, the rate at which people moved increased in Oxford, yet last year, it dropped again to a new lowest level of once every 18 years, meaning as a City, there has been a 44.84% drop in moves by homeowners in Oxford, compared to 15 years ago.

So why aren’t Oxford homeowners moving as much as they did?

In last week’s article I talked about how ‘real’ incomes and savings have been dropping. Another issue is the long-term failure to build sufficient new-build homes of the right type. 

Back in the 1960’s and 1970’s, as a country, we were building on average 300,000 and 350,000 households a year. The Barker Review a few years ago said that for the UK to stand still and keep up with housing demand (inflated by a number of factors including: immigration, people living longer, marital divorce, a 50% increase in the number of households with a single person since the 1980’s) we needed to build 240,000 households a year. Over the last few years, we have only been building between 135,000 and 150,000 households a year. In Oxford just 1% of property sold is new build (just 7 properties sold per month on average over the last 12 months).

As the UK Population gets older, there is no getting away from the fact that a maturing population is less mobile.  Those retired people who want to move are finding there is no suitable smaller option available to them in the place they want to live.

So, what does this mean for Oxford homeowners and landlords?

Many of the older generation in Oxford are stuck in property that is simply too big for their needs. The fact is that, in Oxford, nearly five out of every ten (or 46.5 per cent) owned houses has two or more spare bedrooms; or to be more exact ...

12,470 of the 26,832 owned households in the Oxford

area have two or more spare bedrooms.

As young families struggle to move up the housing ladder, with those young families bursting at the seams in homes too small for them, we have a severe case of under-occupation amongst the older generation – retired people staying put in their bigger homes, with a profusion of spare bedrooms with a dearth of smaller alternative properties available to them.

Many commentators have suggested the Government should give tax breaks to allow the older generation to downsize, yet in a recent White Paper on housing published just weeks before the General Election, there was no reference to any detailed policies to inspire or support them to do so.

This means that there could be an opportunity for Oxford buy to let landlords to secure larger properties to rent out, as the demand for them will surely grow over the coming years. As for homeowners; well those in the lower and middle Oxford market will find it a balanced sellers/buyers market, but will find it a buyers’ market in the upper price bands.  Despite a 17% reduction in completed transactions, prices have risen 7% over the last 12 months, confirming a supply constrained market.

Is Oxford Over Crowded?

Oxford is in the clutches of a population crisis that has now started to affect the quality of life of those living in Oxford. There are simply not enough homes in Oxford to house the growing numbers of people who want to live in the city. The burden on public services is approaching a breaking point with many parents unable to send their child to their first choice of primary or secondary school and the chances of getting a decent Dentist or GP Doctor Surgery next to nil.

That’s what the papers would say anyway! But I’ve taken a look at real numbers, and in particular I’ve looked at the housing issue in Oxford. To start with, the UK has roughly 1,065 people per square mile – the second highest in Europe. The total area of Oxford itself is 12.621 square miles and there are 159,900 Oxford residents, meaning 12,669 people live in each square mile of Oxford, or 11,600 more than the national average…so it’s no wonder we appear to be bursting at the seams!

But, we all know that newspapers, politicians and property market bloggers quote big numbers to sell more newspapers, get elected or get people to read their blog (I recognise the irony!). A square mile is enormous and much bigger than is sounds, so the numbers look correspondingly large (and headline grabbing). Most people reading this will know what an ‘acre’ is, but those younger readers who don’t, it is an imperial unit of measurement for land and it is approximately 63 square metres.

In Oxford, fractionally more than 18 people live in every acre of Oxford, not as headline grabbing, but a lot more relative to everyday life, and if I am being honest, a figure that doesn’t seem that bad.

However, the issue at hand is, we need more homes to be built. In 2007, Tony Blair set a target that 240,000 homes a year needed to be built to keep up with the population growth, whilst the Tory’s new target since 2010 was a more modest 200,000 a year. However, since 2010, as a country, we have only been building between 140,000 and 150,000 homes a year. So where are we going to build them? Because we have no space! Or do we?

Well, let me tell you this fascinating piece of information - I found out recently in an official Government report that in England (which is the most densely populated country of the Union), the 20 million English homes cover only 1.1% of its land mass. That is not a typo, only one point one per cent (1.1%) of land in England is covered by residential property. In more detail, of all the land in England:

·       Residential Houses and Flats 1.1% 

·       Gardens 4.3%

·       Shops and Offices 0.7%

·       Highways (Roads and Paths) 2.3%

·       Railways 0.1%

·       Water (Rivers /Reservoirs) 2.6%

·       Industry, Military and other uses 1.4%

Which leaves 87.5% which is Open Countryside (and if you think about it, add to that the gardens, which are green spaces, and the country is 92.8% greenspace)

As a country, we have plenty of space to build more homes for the younger generation and the five million more homes needed in the next 20 years would use only around 0.25% of the country’s land. Now I am not advocating building massive housing estates and 20 storey concrete and glass apartment blocks next to local beauty spots such as Blenheim Palace or Christ Church Meadow, but with some clever planning and joined up thinking, we really do need to think outside the box when it comes to how we are going to build and house our children and our children’s children over the coming 50 years in Oxford. This should be of concern to owner occupiers and landlords alike, Oxford needs up to 32,000 more homes to buy and to rent to keep up with population growth.  Today, average house prices are 16.2 times average earnings, amongst the highest once London is excluded and growing.  If anyone has their own ideas or opinions, I would love to hear from you.

In the meantime, if you would like to read other articles about Oxford Property Market, please visit the Oxford Property Market Blog www.oxfordpropertyblog.co.uk

Buy-to-let of the week - investor landlord move quickly!

I saw this property and couldn't resist choosing it as our buy-to-let property of the week! 

Being marketed by Oxford Apartments (http://www.rightmove.co.uk/property-for-sale/property-55462735.html) this is a stunning duplex, 2 bedroom apartment with superb balcony views across the Oxford Castle and beyond.

The apartment has terrific natural light making it a spacious and comfortable living environment, and being in the Oxford Castle Quarter it is strategically placed a stone's throw from the Westgate Shopping Centre re-development, and just 5 minutes walk to the High Street.

Hugely popular with foreign professionals visiting Oxford for work placements and anyone wanting to be right at the heart of Oxford's vibrant social and cultural scene.

At £600,000 asking price it seems to be on the money and should deliver a good 4.5% rental yield and as reported earlier, Oxford apartments have out-performed the market in terms of capital appreciation.