To gain a real insight into the current property market in Oxford, we at College and County created a Landlord and Investor survey and distributed this to 500 landlords across Oxford in order to gain a more accurate impression of how landlords feel about the current state of the market, Brexit and what may transpire in Oxford over the coming years.
What we wanted to identify was how current regulations and political changes may affect landlords and investors and what we encountered was quite interesting particularly when questioned what they believe the next 12 months will forecast.
Key findings of the Landlord Survey we identified were:
- 51.89% of landlords and investors surveyed believe that leaving the EU will reduce the number of people seeking accommodation in Oxford.
- 43.4% of landlords and investors surveyed believe that leaving the EU will reduce rents. However, 84.85% of landlords and investors believe that rents will either stay the same or rise within the next 12 months.
- 77.22% of landlords and investors surveyed believe property values will stay the same or fall in the next 12 Months.
- 64.81% of landlords and investors surveyed believe that HMO licensing in Oxford has both raised costs for landlords as well as raised standards for tenants.
The following Pie charts and Bar graphs display the percentages of how participants responded to each question.
Do you think licensing of HMO housing has?
Of the 108 respondents, 70 of those said that HMO licensing has both raised costs for landlords and raised standards for tenants. New rules and regulations for HMO licensing in Oxford are both strict and beneficial for all parties and a licence cannot be granted without full inspections to ensure appropriate standards are met. These standards include ensuring interlinked smoke detection is installed, facilities are adequate, and that all exits are accessible even when external doors are locked.
If you would like further information and would like to take a look at the HMO Consultation document, click here https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/560774/161018_HMO_CONSULTATION.pdf
Do you think leaving the EU will reduce or increase the number of people seeking rented accommodation in Oxford?
Article 50 has been triggered, what now? Seems to be the unsolvable question bewildering many people’s minds particularly when it comes to the housing market. The information taken from this pie chart strongly displays that a minority of people believe leaving the EU will increase those seeking rented accommodation. Findings show a majority towards a reduced amount of people seeking accommodation in Oxford. Brexit has already had an effect on the number of foreign nationals living in the UK, as well as the numbers applying for university places and most famously nursing placements. Although, of course this will be different based on geographical location.
'I think Brexit has had an effect on the number of Europeans seeking accommodation in the lettings market. We have already seen slightly less applying for rental accommodation and less Europeans applying for universities in the UK.’ Says David Gilson, Lettings Director at College and County.
How do you think leaving the EU will impact rental values in Oxford?
From the chart below, 59 of 109 respondents believe that rental values will remain the same and 47 people predict rents will decrease due to Brexit. Leave campaigners forecast that the population of the UK will be 1 million less than projected by 2026 if Brexit takes place, cutting the demand for buy-to-let properties. Lower immigration would of course mean less people looking for accommodation, which would lessen the demand and lower immigration therefore impacting rental prices.
Under the new clause 24, tax relief for Buy-to-let will be cut to a flat rate of 20% from its current 40% or 45%. Do you think you will make any of the following changes?
The bar graph displays a strong majority towards ‘No change’ showing that 82 of 108 respondents will not be making the above changes under the new Clause 24. Only 12.04% of landlords said they might change the structure of their portfolio and 12.04% said they may sell some or all of their properties. In some parts of the country, where investors are heavily geared, many have sought to transfer portfolios into Ltd Company structure to be exempt from Clause 24. Here in Oxford, many investors have little or no borrowing, so Clause 24 has less impact. None-the-less, experts advise landlords should map their way to the future with their end goal in mind, in the most tax-efficient manner in order to try and mitigate the impact of Section 24.
What effects do you think Clause 24 will have on the Oxford market?
The results for this question seem relatively even in that the 109 respondents believe there will be multiple impacts arising from Clause 24. 51.38% of landlords and investors predict that there will be a reduced value of investment properties, 39.45% respondents suggest there will be higher rents and the remaining 35.78% believe there will be more property in owner occupation. As mentioned above, the impact here in Oxford will be not be as detrimental however it is advised landlords and investors weigh up their options and seek legal advice. The changes will be phased in gradually over four years and has already been put into action since April 5th 2017. By 2020, 100% of finance costs will be restricted to 20% tax relief only.
What do you expect rental prices will do within the next 12 months?
The pie chart displays that 55.45% of respondents are confident rental prices will remain the same over the course of the next 12 months, 29.70% believe rental prices will rise and only 14.85% believe prices will fall. The Royal Institution of Chartered Surveyors has predicted that rents will increase by just over 25% in the coming years, while property values are set to grow by less than 20%. It is predicted that over the next 5 years, rents will rise faster than house prices and surveyors forecast by 2022, rents will rise by 25%.
We want to say thank you to all who took part in the survey and appreciate all your help in enabling us to gain a more accurate feel of the property market in Oxford. To those who requested a full report, this will be sent out shorty. Anyone else who would like to receive a copy of the results summary please email firstname.lastname@example.org