Oxford - Countrywide

Oxford
City focus series
Spring 2016
OXFORD - CITY FOCUS SERIES
CONTENTS
Oxford in a minute
Buy
Rent
Average prices
and rents per month
Oxford, best known for its world
renowned university and
architecture, attracts a mix
of people from right across the
globe. But the city is more
complex than the picture of its
dreaming spires.
Oxford’s neighbourhoods each possess
different communities, culture and
housing styles. The city’s transport
links make it well placed for commuters
looking for a more suburban lifestyle
within reach of London whilst accessing
some top schools. Oxford’s popularity
as a place to live combined with a lack
of new housebuilding has piled pressure
onto house prices in the city.
In 2015 average prices in Oxford grew
by 9% to reach 44% above their
2007 peak.
Greenbelt
The size of Oxford’s booming rental
sector has grown by 59% in the last
10 years. Demand for rental
accommodation has come from hospital
staff, employees of BMW, and students
who account for 24% of the city’s adult
population alone. Much of the growth
in renting has been accommodated in
Houses of Multiple Occupancy (HMOs).
Oxford now has the largest proportion of
tenants living in the multiple occupation
homes of any city in the whole country.
With average homes inside the ring
road now costing £460,000, 15 times
the average income, Oxford is growing
increasingly unaffordable. With space at
a premium, the city’s growth has been
restricted. The surrounding greenbelt
land and floodplains mean land for new
development is limited. In 2014 only 50
homes were built in Oxford, which has put
significant upward pressure on prices.
1 Bed
Postcode
71% OX2
14% OX3
9%OX1
£233,000
£915
Contents
6%OX4
2 Bed
Oxford’s 5 most
expensive roads
£310,000
£1,100
3 Bed
£371,000
£1,300
Crick Road
OX2 - £4.9 million
02
Oxford in a minute
04
Neighbourhood watch
08
Oxford unlocked
Charlbury Road
OX2 - £2.7 million
4 Bed
Park Town Road
Bicester
OX2 - £2.6 million
Floodplain
Kidlington
£589,000
Oxford
city centre
Where are Oxfords
£1 million plus sales?
£1,700
Warnborough Road
OX2 - £2.3 million
Wheatley
St Margarets Road
OX2 - £2.1 million
Abingdon
2
3
OXFORD - CITY FOCUS SERIES
OXFORD - CITY FOCUS SERIES
Summertown, OX2
Headington, OX3
Average price £678,000
Average price £411,000
Average monthly rent £1,700
Average monthly rent £1,290
Price growth since 2007 +65%
Price growth since 2007 +42%
Summertown flourished during the 1820s when
Oxford University released large tracts of farmland.
Today beautiful semi-detached Victorian and
Edwardian houses line the side streets, within easy
walking distance of Oxford town centre along the
canal. North Oxford is amongst the most expensive
parts of the city and prices have risen 10% in the
last year alone. Upmarket Summertown is a popular
choice for families relocating for some of the top
schools in the country as well as a chic high street.
Headington is a large residential area on London
Road, predominantly built during the 1920s around
the medieval village of Old Headington. As a result,
the housing stock is mixed and comprises both 200
year old cottages in Old Headington and the 1950’s
Wood Farm estate. The area is in high demand from
university students and medical staff, due to its
proximity to Oxford Brookes University and the John
Radcliffe Hospital. As a result there is large rental
market with heavy investor buy in.
Where do people moving
in to Oxford come from?
6%
Household tenure
5%
6%
London
24%
8%
Cambridge
Scotland
52%
10%
Bristol
65%
Rented
Reading
Owned outright
Birmingham
Owned with a mortgage
The City Centre, OX1
Cowley, OX4
Average price £497,000
Average price £340,000
Average monthly rent £1,500
Average monthly rent £1,140
Price growth since 2007 +41%
Price growth since 2007 +25%
Oxford city centre is home to a large number
of impressive buildings, many of which are owned
by Oxford University. The historic nature of the
city centre and the amount of land owned by the
university means it looks much as it did a hundred
years ago and has only a small residential population.
This has started to change however with the
transformation of Oxford Castle from a prison into
a more open part of the city centre as part
of a mixed use development. The site now includes
a hotel, residential apartments as well as a selection
of bars and restaurants.
Cowley is both a residential and industrial area
that was transformed in 1912 when William Morris
developed a car factory, which today is occupied
by BMW. The up and coming area which surrounds
the famous Cowley Road offers a mix of independent
bars, restaurants and shops enclosed by streets
lined with terraced homes, originally built for factory
workers. Property in Cowley is more affordable than
Headington, prices are currently 17% below the
Headington average. The area and its affordability
attracts first time buyers and young professionals
due to its proximity to the new Oxford Business Park
and easy access to the city centre.
Average price
Over £500,000
£350,000 to £500,000
£300,000 to £350,000
£250,000 to £300,000
Under £250,000
4
24%
5
OXFORD - CITY FOCUS SERIES
OXFORD - CITY FOCUS SERIES
Oxford unlocked
Oxford versus Cambridge
The rivalry between Oxford and Cambridge Universities extends beyond
its universities. Both cities compete fiercely with each other for growth.
Even since the late noughties, house prices in Oxford have increased
at a faster rate than Cambridge’s making Oxford one of the most
unaffordable cities in the country. Local employers, particularly hospitals
and schools have raised concerns that they are losing key workers as
affordability pressures rise.
Both Oxford and Cambridge have similarities beyond the fact they host
two of the most prestigious universities in the country. Both are wealthy
and attractive cities, within an hour of London and both are limited
by tightly drawn greenbelts. However, Cambridge built 800 homes
in 2014, nearly eight times the amount built in 2002, whereas Oxford
built just 50.
A needs assessment commissioned by Oxford Council in 2014 found
that Oxfordshire needs to build 32,000 new homes by 2031, with the city
itself allocated 10,200. Geographical barriers mean that the rest of the
housebuilding burden will fall on surrounding rural areas, adding
pressure to Oxford’s transport infrastructure. But with recent flooding
in the Iffley area, the council will be even less likely to grant planning
permission for developments near floodplains. However, they do appear
to be more open about developing on the greenbelt.
Oxford faces a challenge to deliver more homes and better
infrastructure. The new Oxford Parkway station and the Barton Park
development is a step in the right direction to boost the city’s growth,
but there is still some way to go.
“In 2014, Cambridge built 800 homes, whereas Oxford built just 50”
Oxford v. Cambridge House Building
1990=100
300
250
200
150
100
The Waterways, OX2
Renting in Oxford
The Eagle Ironworks was founded
in 1812 and overlooks the Oxford
Canal near trendy Jericho. In 2007
the ironworks were demolished
to make way for several large
apartment blocks. A number of units
were retained by the Ironworks
company and are now let out
privately. There are around 230 high
specification apartments in total with
underground parking and canal views.
The Waterways was developed
on a brownfield site previously
occupied by the British Motor
Corporation factory. The development
is connected to Woodstock Road near
Summertown and offers a mix of flats
and houses. The large number
of homes meant the development
was phased with the first units going
on sale in 2000 while the last sale
didn’t complete until 2007.
Headington has long been a rental hotspot attracting buy to let investors
given its proximity to Oxford Brookes University and a number of hospitals.
However there has been a recent shift in demand with investors
focussing on the up and coming area of East Oxford and Cowley which
attracts students as well as professionals working in the nearby business
park. 40% of Oxford’s tenants live in Cowley, OX4 and the price gap
between OX4 and Headington, OX3 has narrowed. Both areas offer
attractive yields in comparison to the rest of Oxford and the additional
3% stamp duty tax announced in the 2015 Budget could see investors
increasingly looking for homes in these cheaper areas of Oxford.
Average price 2007 £283,500
Average price 2002 £313,000
Average price 2015 £704,700
Average price 2015 £711,300
Oxford Parkway
Reliance Way, OX4
Oxford Parkway station opened
in October 2015 in North Oxford,
just outside the ring road. Services run
twice an hour to Marylebone via
Bicester and take 56 minutes.
The station and new services will
reduce journey times and relieve
congestion. Chiltern Railways have also
announced their intention to re-open
the line from Cowley to Oxford
to passengers which would serve
to improve infrastructure links across
South East Oxford and relieve
congestion at Oxford Station which
is projected to reach capacity by 2019.
Berkeley Homes acquired the site just
off Cowley Road in 2004 from Oxford
Bus Company who had used it as their
main bus station for 80 years.
The development contains a mix
of flats and houses, with an additional
block of student accommodation built
in 2012. However, a recent
application to re-develop a former
Victorian hospital which borders the
site has been declined.
Average price 2006 £250,900
Average price 2015 £294,800
Houses in Multiple Occupation
With 2 in every 5 Oxford tenants living in an HMO, the introduction
of HMO licensing in 2011 had a large effect on the Oxford rental market.
Licensing was introduced to improve living standards for sharers whilst
preventing families being priced out of the market by limiting the number
of homes in an area which can be turned into HMOs to 20%. Strong
demand from university students and medical trainees have made
HMOs attractive propositions for landlords, offering yields
of 7% compared to an Oxford average of 4-5%. HMOs are concentrated
around Cowley, Iffley and Jericho due to their proximity to the
universities. The limit on the number of HMO properties allowed
in an area has meant that in some wards, homes that come with
a license carry a £40k-£50k premium.
Rental dashboard
12 Month Rental Growth
Days to let
23
5.4%
5.3%
Average
tenancy length
5.2%
16
5.1%
months
5.0%
Proportion of lets
made above
asking price
4.9%
50
4.8%
Oxford
20
14
20
12
8
6
4
20
10
20
0
20
0
20
0
0
20
02
8
Cambridge
20
0
4
6
19
9
19
9
19
9
0
19
9
19
92
0
6
Eagle Works, OX2
Source: DCLG
4.7%
OX4
OX3
OX2
OX1
14%
7
Authors
Aneisha Beveridge
Graduate Analyst
beveridgea@hamptons-int.com
David Fell
Research Analyst
david.fell@countrywide.co.uk