Slowing Oxford Property Market? Yes and No!

Being a buy-to-let landlord in Oxford is a balancing act many do well. Talking to several Oxford landlords, they are conscious of their tenants’ capacity and ability to pay the rent but feel with their own costs rising, there is now pressure for rents to rise.

Historic evidence suggests that the rents new tenants have to pay typically increase during the summer months. June, July & August is a time when renters like to move, demand surges and the normal supply and demand seesaw mean tenants are normally prepared to pay more to secure the property they want to live in.

Rents in Oxford on average for new tenants moving in have risen 0.9% for the month, taking overall annual Oxford rents 0.9% lower for the year

However, several Oxford landlords have expressed their apprehensions about a slowing of the housing market. I personally feel their negativity may be misplaced.

The other side of the coin for property investing is capital values (which are of interest to all the homeowners in Oxford as well as Oxford buy-to-let landlords).  I believe the Oxford property market has been trying to find some level of equilibrium since the New Year.  According to the Land Registry

Property Values in Oxford are 7.49% higher than they were 12 months ago, despite a drop of 0.07% last month

Yet, I would take those figures with a pinch of salt as they reflect the sales of Oxford properties that took place in early Spring 2017 which are only now exchanging and completing during the summer months.

The reality is the number of properties that are on the market in Oxford today has risen by 41.02% since the New Year at a time when the total number of transactions is down by 17% which will have a dampening effect on property values. As tenants have less choice, buyers now have more choice and that will temper Oxford property prices as we head towards 2018.

Be you a homeowner or landlord, if you are planning to sell your Oxford property in the short term, it is crucial, especially with the rise in the number of properties on the market, that you realistically price your property when you bring it to the market.  With the increase in choice of properties, the balance of power during negotiation generally sways towards the buyer.

6,564,678 People use Oxford Train Station a year - How does that affect the Oxford Property Market?

It might surprise you that it isn’t always the nicest most picturesque villages around Oxford or the most desirable Oxford streets where properties sell or let the quickest. Quite often, it’s the ones that offer the best transport links. There is a reason why one of the most popular property programmes on television is called Location, Location, Location!

As an agent in Oxford, I am frequently confronted with queries about the Oxford property market, and most days I am asked, “What is the best part of Oxford to live in these days?”,.  Now, the answer can be different for each person – a lot depends on individual factors e.g. the age of their family, their age, schooling requirements and interests etc. Nonetheless, one of the principal necessities for most tenants and buyers is ease of access to transport links, including public transport – of which the railways are very important.

Official figures recently released show that, in total, 9,017 people jump on a train each and every day from Oxford Train station. Of those, 2,811 are season ticket holders. That’s a lot of money being spent when a season ticket, standard class, to London is £5,724 a year.

The bottom line is that property values in central Oxford would be much lower, by at least 3% to 4%, if it wasn’t for the proximity of the railway station and the people it allows access north and south of the City

Rail is becoming increasingly important, as the costs associated with car travel continue to rise and as the roads are becoming more and more congested. This has resulted in a huge surge in demand for rail travel.  

Overall usage of the station at Oxford has increased over the last 20 years. In 1997, a total of 3,064,352 people went through the barriers or connected with another train at the station in that 12-month period. However, in 2016, that figure had risen to 6,564,678 people using the station (that’s 18,035 people a day).  Hence the huge investment in capacity at Oxford parkway station where parallel investment in bus routes to/from Oxford has driven house prices in and around Kidlington, meaning that house price growth continues to track above the average for Oxford.

A property’s location relative to the train station has an important effect on its value and saleability in Oxford. It is also significant for tenants – allowing car-free living to be realistic in a City that wishes to limit car usage.

One of the first things house buyers and tenants do when surfing the web for somewhere to live is find out the proximity of a property to the train station. That is why Rightmove displays the distance to the railway station alongside each and every property on their website – they know it is in the top 5 criteria applied by buyers and tenants alike.  To illustrate this, recently a couple came to me looking for a property 5 minutes’ walk from Oxford station and 5 minutes’ walk to the central shops, restaurants and bars.  They wanted 2 bedrooms, one bathroom and wanted to keep the monthly rent to around £1,000.  In the event, they achieved their perfect location, but had to raise their budget by 20%, reflecting the premium that proximity to the stations carries.  They are now living just off St Thomas Street, just a few hundred yards from the Central station.

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.