As with all seismic shifts in the economic and political landscape there will be both challenges and opportunities in the property sector in Oxford. The primary drivers of far greater supply than demand, will certainly soften any blow here; traditionally Oxford has been relatively “bullet proof” in property down-turns, and we can see no reason why this situation would be any different. All the property pundits in the national arena, are predicting a period of reduced transactions. Fewer people moving and less people seeking to live independently, has certainly seemed to impact on the stock of one bed accommodation a sector of the market that is still suffering from temporary over-supply because of the rush to beat the stamp duty hike by investors in April.
Certainly, the uncertainty pre-referendum stopped many people looking for a move.......since the vote, at least people have started to look again and there has been more activity both on our website and through the portals. It is interesting that although there have been falls in the share value of many property companies including Foxtons and Coutrywide, those that are lettings based such as Martin and Co seem to have held up well. All the evidence from colleagues in residential sales is that transaction rates are holding up well, and it would appear that it is only commercial property, so dependent on overseas money, where there are already signs of concern.
It is likely that reticence to buy will mean that there will be some interesting opportunities for investors who may be able to benefit from a downward pressure on values and pick up a bargain. As always timing will be everything, and if you see something attractive and would like a second opinion, do not hesitate to get in touch. 01865 722722
It is of course early days to speculate on some of the negative impact on the property market in Oxford following the result of the referendum, but there are strong indicators that both Town and Gown will be hit harder than we might imagine. The University is in receipt of income totalling nearly £70m from the EU in the shape of research grants that have apparently been frozen, whilst the dust settles and the details are negotiated. Although this is not a large sum compared to some of the numbers being tossed around at the moment, it will likely have a dramatic impact on the number of research fellows invited to the city, and consequently reduce demand in what has for some years now been the strongest growth area, post-graduate accommodation.
There is also the rumour flying round Oxford, that BMW will be reducing to two shifts rather than the current three in a 24hr period in the New Year. Against falling orders due to the drop in oil prices and better fuel efficiency in larger cars BMW is experiencing less demand in the small car market. Apart from the temporary staff that will be laid off by BMW the logistics and component spin-offs are major employers in the area and any change will have a significant impact the property market.
In conclusion, there will be ups and downs over the coming months, but we firmly believe that the basic market drivers will mitigate against any long-term or deep drop in values of both yield and capital. We still have clients who are looking to add to their portfolio, and although they may be a little more circumspect before exchange, for any-one with cash in the bank, Oxford residential property still offers reasonable overall return, with relative low risk.