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Thursday 24 November 2016

What we need in Oxford is more home owners AND more Landlords!


I’ve been asked by a number of readers why I haven’t posted following the autumn statement by the Chancellor and in particular commenting on the surprise announcement about the plans to consult on a plan to ban ‘upfront tenant fees as soon as possible’.  Richard and I have been asked to comment by newspapers and so far, we’ve politely declined to comment.  And, here’s why….

Too many other commentators are jumping to doomsday conclusions and predicting the end of the property market as we know it, when they don’t yet know what is being proposed, or when the changes will come into force.

Will it be a tough transition for letting agents? – yes; is it likely to increase costs for landlords? – yes, probably; will it help or hinder the supply of affordable homes in Oxford? – at best it will be neutral, at worst negative.

As readers know I believe that the fundamentals of Oxford property remain strong for investors and owner-occupiers alike.  Capital growth is excellent and I believe will prove resilient come what may; average rental yields remain strong vs national benchmarks, although there is great variability between post-codes and property types (from 3.5% in some areas up to 8% plus for well located houses in multiple occupation).  Savvy investors recognise that they can no longer have a narrow set of investment criteria, instead broadening their horizons to build a portfolio that optimises capital growth and rental yield.

I was delighted to hear that house building is being prioritised via the £2.3bn housing infrastructure fund, and I hope that Oxford benefits early given its minimum requirement for 400 new houses a year (that’s around 3 times the current rate of building).  However, I feel the Government remains too fixated on the home-ownership dream, rather than taking a broader strategic approach that recognises that new rented social housing and new private rental properties are required as well as new homes to buy  – close to 7000 new rental homes are required in Oxford by 2025, way more than can be built no matter how much money is spent. 

Ahead of the detail that is required for informed comment, I am concerned that the government remains anti-landlord in the mistaken belief that the country needs fewer landlords and more home owners.  In fact, what we need in Oxford is more home owners AND more landlords. I believe some excellent landlords may be forced-out of the market by the sheer weight of Government anti-landlord policy, and that others may be put-off further investment as alternative investments become viable once more.  If that happens, the Government will be forced to back-peddle, but by then the damage may already be done. 
The Oxford to Cambridge high-tech highway was is great news, linking the nations pre-eminent knowledge economies.  But jobs need people and people need homes - to rent and buy.  Let's hope that the homes are made available!

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