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Boom in East Oxford makes it one of the Top 10 buy-to-let hotspots in the UK

Friday, August 22, 2014 Posted in: Property Market

Oxford was recently identified as one of the Top 10 buy-to-let hotspots in the UK by an HSBC Industry report.

Throughout 2012 and the first quarter of 2013 the Oxford property market stood relatively still. In the past 18 months the market has picked up out performing most of the country outside of London. If the country as a whole was performing as well as Oxford interest rates would have already been increased but this is not the national picture. In March 2014 Doncaster a town with a population of over 302,000 had 278 house/flat sales complete, Oxford a town with little over 150,000 had 778 sales complete, a clear sign that this is a very buoyant market.

Over 50% of housing within the city is privately rented and demand for housing is at an all-time high with rent increases averaging 3%+ year on year for the past 5 years. Property prices within the city have risen on average 6.5% between April 2013 and April 2014, with detached houses performing best with average increase of 14% (home.co.uk). There is very limited scope for further development within the ring road due to lack of plots and uncompromising planners, this along with the £130m allocated for improvements to Oxfords rail links to London and Milton Keynes interest in the city is unlikely to waiver.

At College and County we have helped a number of clients find potential investments in the city. As a letting specialist agency without a ‘sales’ agenda we can give impartial advice on potential investment options and help purchasers fully understand the market for any particular property. Investors looking only at the Yield figures might be put off, there is no doubt that better returns are available in other cities of the UK but few city’s offer such a stable platform for investment with potential for exceptional capital uplift.

Cowley road was recently named the 8th coolest road in the UK by the Sunday Telegraph and increasingly East Oxford is being seen as ‘The new Jericho’. Mark Crampton Smith, director at College and County says “The whole of East Oxford has gone berserk, and we are seeing it becoming ever more similar to Jericho. It’s a bohemian quarter which has attracted trendy students for quite a while but there has been a shift in the past 18 months. Now, we are seeing upwardly mobile professionals and older, more established residents, often empty nesters, choosing to move there from other areas, such as Summertown and Jericho.”

Certain key roads in East Oxford have seen property values increase over 20% in the past 12 months and there is little sign of this slowing. In April 2014 the average asking price for a flat in OX4 was £183,000; 12 months on in April 2014 the average is £231,000 this is an increase of over 25%. One client of College and County brought a flat on Union Street in 2012 for £185,000 and has recently re-mortgaged the flat at £270,000 an impressive increase of over 45% in 24 months. Semi-detached houses in OX4 have also preformed exceptionally with April 2013 average of £223,000 and April 2014 average of £311,000 a near 40% yearly increase.

You may have heard people refer to the ‘The golden triangle’, this is the area radiating out from The Plain, and running between St Clements and Iffley Road and up as far as Magdalen Road. Some of the most sought-after streets within this being Jeune Street, Alma Place, James Street, Bullingdon Road and Temple Street. Historically this area of Oxford has been considered the student district with Landlords over chopping houses to maximise on rooms to let. This strategy is no longer sustainable or efficient with the surge in purpose built developments and increased expectations of student tenants. College and County have seen and helped many investors and landlords move property away from traditional ‘student’ letting and instead with refurbishment create a new market for high end professional shared accommodation. With average room rates for student shared houses at £400pcm and the average rent of a studio or one flat at £775pcm there is increasingly a market for this middle ground. Young graduates and professional sharers are happy to pay £500-£600pcm per room provided the accommodation is of a high quality and feels like step up from the accommodation offered to students. One client purchased a property on St Marys Road in East Oxford in early 2014. The property was previously offered as a traditional student let for 4 sharers at £1520pcm. After refurbishment (no structural changes) the property has been let to a group of 4 professional sharers at £2300pcm.

So after reading this I expect you are set on investing in Buy- to- let Oxford so what next…

Unfortunately competition for good investments is fierce. We would always recommend ensuring you have found a mortgage and have a clear investment budget before you start looking as it’s a sellers’ market and you are unlikely to be a preferred bidder without all your ducks in a row. Oxfords Estate agents are advertising ‘Guide prices’ for properties rather than asking prices. This is to ensure best values are achieved in growth market. One local agent claimed that in the past 6 months nearly 90% of properties sold achieved at or over guide.

College and County offer free impartial advice on the market. We would be happy to discuss any potential investments or help find you a suitable investment based on your specific requirements and budget. We do not sell properties and do not charge for our time helping you find an investment property. We are confident that once you have met the team and experienced the quality of service we offer our clients you are unlikely to look any further when looking for an award winning ethical letting agent to look after your investment. Call to talk to David now on 01865 722722

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