Buy to Let - why Oxford?

In this blog we examine some of the major characteristics specific to the Oxford property market, and how they combine to create an exceptional environment for long term Buy to Let investment. 

Gown 

Life amidst the spires at the heart of historic Oxford revolves around the universities. Oxford University and Oxford Brookes University combine to accommodate around 33,000 full time students. This is the largest proportion of adults in full time studies from any city across England and Wales. 

Despite significant recent university accommodation development there still remains a shortage. Many students also prefer to ‘live out’ in private rented accommodation for their second and third years. This maintains a healthy demand for privately rented student housing. 

Town 

The wider resident population of Oxford just exceeds 152,000 and the city is renowned as a thriving innovation, science and research centre of expertise.

71% of jobs in Oxford are in 'knowledge intensive' industries such as the large Headington teaching hospitals, growing science and business parks and an emerging hub of 'start up' technological firms. Major employers outside of the universities include Oxford University Press, The Radcliffe Hospital Trust and Unipart.

Location 

Oxford is excellently placed to enable easy access by both road (A34 / M40) and rail (Paddington and Marylebone) to London and the Midlands. A new East West rail and housing corridor between Oxford and Cambridge is currently under construction to create a valuable and beneficial 'brain belt' link between the two cities. 

Oxford also acts as a tourism gateway to the neighbouring Cotswolds and generally attracts 7 million tourists each year contributing £780 million to the local economy. Demand for short stay holiday accommodation is therefore strong.

Built environment 

The unique geographical form of Oxford is largely determined by the physical constraints of a ring road and large areas of flood plain. Both combine to limit possibilities for large scale new housing development. 

The same characteristics also create pockets of housing rather than sprawl and give each area of housing a distinctive character. Tenants tend to come with very definite preferences on the area in which they wish to live.

Rental market 

The rental market sees high demand for a range of housing from small modern apartments to large period houses. Quality across all sectors is key as many tenants will happily pay handsome rents for smart and well located accommodation, particularly for short stay visits.

The overall rental market falls into three main micro markets, each with distinct characteristics: student tenants, young professional tenants and short stay tenants. 

Investing in Oxford 

A shortage of housing supply underpins Oxford’s safe and stable housing market. This is demonstrated in house prices. The current (2020) average house price value is £408,000 compared with a UK national average of £224,000. Oxford is often scored as one of the least affordable UK cities, with house prices exceeding 17 times average local salaries.  

Many tenants in Oxford visit on academic or employment contracts and have no intention of putting down roots. These tenants typically refer to rent for their period of residency. 

Ensuring that location and specification are suited to the target tenant audience is vital in maximising investment returns. Short stay and student accommodation investment come with other specific location, planning and licensing considerations which require careful attention. 

For an appropriately located and correctly specified property investment securing tenants is usually remarkably easy. As a result void periods (empty days) are minimal, another major factor in the appeal of investing in Oxford. 

An excellent location, safe property market, thriving local economy and consistently high rental demand all combine to secure Oxford’s position as a first rate Buy to Let destination. To discuss the local market and your investment plans please don’t hesitate to contact us.  

(Sources: HomeTrackUK & OxfordCityCouncil)