Oxford is the worst-kept secret in property investment
Recognised for its world-class science and information assets; high-growth companies, talented pool of workers that is 434,800 strong and a total output of £21.9 billion, the Oxfordshire economy is one of the strongest in the UK with Oxford at its heart.
At the centre of this thriving economy, Oxford is forecasting excellent economic success as part of the ‘Growth Corridor’ that includes Oxford, Milton Keynes and Cambridge. The city ranks 3rd in the country for rising property prices, peaking at 55% when compared with a decade ago. This, plus exceptional employment opportunities, has driven a huge amount of demand for housing in the area.
Huge investment projects and large infrastructural changes have helped improve connectivity throughout the region, re-connecting Oxford and Cambridge while developing new routes to Bicester and Bedford. With the completion of East-West Rail and Crossrail, accessibility to the capital and other key destinations in the South East have become much more direct and travel times have been reduced across the board.
As the area experiences the same residential undersupply occurring across the country and city centre living continues to grow in popularity, Oxford has a lot to offer both investors and tenants – from the ancient University of Oxford and thriving knowledge economy to the quintessential British lifestyle it has become synonymous with.
Offering easy access to the capital, professional tenant demand, some of the top educational institutions in the world and stunning landscapes, Oxfordshire is quickly becoming one of the worst-kept secrets in property investment.
London vs Oxford Property Investment
Oxford is widely regarded as a destination for London commuters that want a more affordable market. With the average property price in Oxford sitting at £499,507 vs a London average of £659,660, at the time of writing Oxford property is much more affordable but continues to experience growth while London continues to suffer.
In terms of tenant demand and employment, Oxford maintains an unemployment rate of less than 1%, with a large majority of the working-age residents economically active. This is much lower than the national average which currently sits around 4%.
Oxford also remains a top location for domestic and overseas investment. Foreign direct investment (FDI) is one of the biggest drivers of success for the area with 1,300 new jobs being created – a 122% increase in 2018’s figures. This has contributed to Oxford building one of the strongest regional economies in the UK.
Oxfordshire remains one of the most attractive locations for both domestic and international investment – a huge success driver for the region that has created 1,300 new jobs via foreign direct investment in 2019. A large majority of Oxfordshire’s foreign investment has been triggered by an increase in the region’s retail strength, from the redevelopment of Westgate Oxford to Bicester Village’s continued growth. Around 66% of this investment was completely new which had a significant impact on the economy and job creation across the county.
East-West Rail Project
Part of the larger Growing Bicester initiative, the East-West Rail Project is a major development that is reconnecting Oxford and Cambridge while building new links to Bicester and Bedford. Due for completion soon, the East-West Rail Project will provide more direct rail services and improve journey times across the region. Alongside Crossrail, East-West Rail Project is one of the most important infrastructure projects in the South and will be a huge boost for the region’s accessibility.
Growing Commuter Population
The main challenge for Oxfordshire is serving the ever-increasing demand for Oxford, especially as the city experiences a huge population boost. This has resulted in a large ‘commuter population’ of over 57,000 people commuting into Oxford at the time of writing, seeking exceptional employment opportunities and incredible leisure amenities. Increasingly, both working professionals and students are looking at areas around Oxford, such as Bicester, which offer lower property prices and a short commute into the city.
A technological and educational hub on a global scale, Oxford’s educational facilities employ a large majority of the total workforce, although other sectors such as publishing, tourism, hospitality and high-technology industries are significant for employment. The iconic University of Oxford is the top university in the world, with a student population of 23,975 and a huge graduate pool for employers to choose from. This continued educational demand means Oxford remains a highly lucrative investment opportunity for residential investment, especially for strategies targeting students or young professionals.
As a whole, Oxfordshire is one of the highest performing economies in the UK – utilising a ‘knowledge-based’ economy to create sustainable growth. With a total population of 683,000, of which 370,000 are economically active, Oxfordshire maintains a highly-trained workforce as a necessity to continue utilising and applying knowledge. The number of active businesses in Oxfordshire has also grown, increasing by 10.13% over the last 5 years, a huge rise in relation to its size and population.
Looking at future residential developments, the Government has pledged to support Oxfordshire plans, aiming to build 100,000 new homes by 2031 while providing £215 million for transport infrastructure projects. This will mainly be done via projects such as Graven Hill and Growing Bicester Together, which aim to incorporate new housing alongside economy and employment sector improvements. Set out by Cherwell District Council, Growing Bicester is aiming to deliver 10,000 new homes, 18,500 new jobs, new rail lines, improved road routes and regeneration projects.
The UK’s Golden Triangle
Oxford’s positioning within the UK’s ‘Golden Triangle’ ensures it has one of the most envious locations in the country. With direct access to the capital, Heathrow and the wider South, Oxford has quickly become a top destination for knowledge, high-tech industry and strong tenant demand, forming the ‘triangle’ alongside Cambridge and London.
The most enterprising city in the South East
Commercially, Oxford has plenty to offer, with a large market for working professionals and over 4,800 businesses collectively employing 135,000 people. Although the various education hubs around the city employ a large majority of this workforce, other sectors such as publishing, tourism, hospitality and high-technology industries are significant for employment.
7 million visitors pass through a year, with Oxford acting as the tourism gateway to the rest of Oxfordshire. Tourism generates over £780 million of income for local businesses and has pushed Oxford to the 7th most visited city from foreign tourists and business people. All of this contributes to Oxford’s GVA per worker, which is the 7th highest of all UK cities.
The Number One University in the World
If the city of Oxford is the jewel in the crown of Oxfordshire, the University of Oxford is the city’s most important feature. A focal point of the whole city, Oxford is the top university in the world and a huge draw for both domestic and international students. With a student population of 23,975, international students account for 43% of the total population and demonstrate how attractive Oxford is on an international scale.
This also means that Oxford has a strong pool of graduates for employers to choose from. Couple this with the city’s continued undersupply of available homes to meet demand and it’s obvious that Oxford remains a highly lucrative investment opportunity for residential landlords, especially those that are targeting a strategy with students or young professionals.
When it comes to predictions, it’s important to consider what is happening now and how that could evolve as we progress through 2019.
One of the major developments for Oxfordshire going forward will be the East West Rail Project. By improving connectivity across the region and finally reconnecting embittered rivals Oxford and Cambridge, travelling around the ‘Golden Triangle’ will be made much easier.
Demand for Oxford will no doubt remain high – it’s still one of the educational hotspots of the globe after all. Although it currently remains unaffordable for most buyers, the demand for rental properties in and around Oxford is still high, the perfect opportunity for an investor who wants to take advantage. As the private rented sector grows, Oxford may be one of the cities that benefits the most from Government regulations that favour tenants.
The main aim of Oxfordshire will still be maintaining the standard of living in Oxford while juggling an ever-increasing demand. Residential undersupply is still a huge issue for the county (and UK as a whole) so the local authority will need to ensure that supply is increased to meet rising demand.
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