Oxford City focus series Spring 2016
CONTENTS Oxford in a minute Buy Rent Average prices and rents per month Where are Oxfords 1 million plus sales? 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. 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 233,000 915 2 Bed 310,000 1,100 3 Bed 371,000 1,300 4 Bed Oxford s 5 most expensive roads Crick Road OX2-4.9 million Postcode 71% OX2 14% OX3 9% OX1 6% OX4 Charlbury Road OX2-2.7 million Contents 02 04 08 Oxford in a minute Neighbourhood watch Oxford unlocked Greenbelt Floodplain Bicester Park Town Road OX2-2.6 million Kidlington 589,000 1,700 Warnborough Road OX2-2.3 million Oxford city centre Wheatley St Margarets Road OX2-2.1 million Abingdon 2 3
OXFORD - CITY FOCUS SERIES Summertown, OX2 Average price 678,000 Average monthly rent 1,700 Price growth since 2007 +65% Headington, OX3 Average price 411,000 Average monthly rent 1,290 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% 5% Household tenure London Cambridge Scotland Bristol 8% 6% 10% 65% Rented 24% 24% 52% Reading Owned outright Birmingham Owned with a mortgage The City Centre, OX1 Cowley, OX4 Average price 497,000 Average monthly rent 1,500 Price growth since 2007 +41% Average price 340,000 Average monthly rent 1,140 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. Average price Over 500,000 350,000 to 500,000 300,000 to 350,000 250,000 to 300,000 Under 250,000 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. 4 5
OXFORD - CITY FOCUS SERIES Oxford unlocked Oxford versus Cambridge Eagle Works, OX2 The Waterways, OX2 Renting in Oxford 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. 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. Average price 2007 283,500 Average price 2015 704,700 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. Average price 2002 313,000 Average price 2015 711,300 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. Houses in Multiple Occupation 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 50 300 250 200 150 100 50 0 1990 Oxford 1992 1994 Oxford v. Cambridge House Building 1990=100 1996 Cambridge 1998 2000 2002 2004 2006 2008 2010 2012 2014 Source: DCLG Oxford Parkway 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. Reliance Way, OX4 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 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 5.4% 5.3% 5.2% 5.1% 5.0% 4.9% 4.8% 4.7% 12 Month Rental Growth OX4 OX3 OX2 OX1 Days to let 23 Average tenancy length 16months Proportion of lets made above asking price 14% 6 7
Authors Aneisha Beveridge Graduate Analyst beveridgea@hamptons-int.com David Fell Research Analyst david.fell@countrywide.co.uk