At the time of writing this piece, the general election is almost upon us and, inevitably this has bought a degree of uncertainty to the property market. However, the significant driving factors in the Oxford property market remain in place.
We sometimes forget that Oxford is a relatively small city, but with a prosperous micro economy and enjoys low unemployment. Demand for housing is high and demand almost always outstrips supply. This has resulted in a steady growth in property prices.
In recent years we have seen more strictly regulated residential mortgages, This accompanied by high property prices has resulted in a shift in the profile of first time buyers in the city. Young professional people, without the benefit of a significant deposit fund are tending to rent until an inheritance or a similar injection of capital allows them to enter the marketplace. This has created a most specific need for good quality rented accommodation. This demand is being met by a similar shift in the profile of landlords in the city. The legislation controlling Houses in Multiple Occupation (HMOs) has increased the standard of such accommodation and also has had the effect of driving investors towards smaller units with lower density occupation. This rental housing stock generally requires less maintenance and tends to result in longer term tenants. HMO property investment certainly has its place. Greater percentage returns are often achieved but the property generally has to work harder and higher maintenance bills can be the result. Investor landlords are attracted to property by the prospect of capital growth and a yield rather better than the return on banked savings. Many investors also feel that a volatile stock market is best avoided.
So what does the future hold? This brings us back to the impending election. The election is likely to be dominated by Brexit, the NHS and home security after recent tragic events. Those of us connected with the housing industry would say that we need a policy and an economy, able to promote the building of new, good quality housing. The economy over the last three decades has been built, in no small part around the property industry. Recent changes in the budget altering the stamp duty thresholds and significantly increasing the stamp duty payable on investment property, have made people less inclined to move house and have made buy-to-let property less lucrative. We say, lets promote home ownership. Let’s also encourage buy-to-let investment, not forgetting that this will answer the call for good quality rental accommodation for those who deserve decent accommodation while they wait to become home owners themselves.