Posted by Bill Cooper at Friday, August 23, 2019
Oxford Property Blog
In Oxford, the average home now costs £405,600 according to Zoopla, which is 11.9 times the average single person income of £33,900. With Oxford house prices static in Oxford according to Zoopla, average wages are now outstripping house prices.
This still places Oxford as the 3rd least affordable City in the UK behind London (13.1 times average income) and Cambridge (12.2 times average income).
So why is Oxford property so expensive? Some factors are shared by Cambridge - it's a World famous centre of learning, with beautiful historic architecture and positioned well for commuting to/from London and for accessing Cotswold chocolate box villages and countryside at weekends.
But that's not what's driving the high cost of Oxford homes. The real cause of high house prices is the lack of new starter homes and down-sizer homes being built. Just 2% of housing is new build, and most new build relates to larger 3, 4 and 5 bed properties targeting affluent families.
Too many Oxford retirees are living in homes that are too large for them because there are no suitable properties for them to down-size into. At the other end of the scale starter homes are virtually non-existent, forcing many affluent young professionals to rent homes for longer than is necessary.
I am asked daily by Oxford prospective home buyers 'will prices crash with Brexit?'. My current response is there could be a short-term dip, but I can't see how prices will crash. Demand for homes in Oxford is high, and sellers expectations of value are also high. Most sellers will stay put rather than sell at a low price, and if demand surges there will be lower supply and higher demand.
And, the fundamentals will be the same - too few starter homes, too few down-sizer homes and new supply languishing at the low single digit percentage of supply.
Oxford homes owners and landlords may need to weather some 'headwinds' but their assets remain valuable over the medium to long-term.