West of England Property Insights

Lack of supply means affordability of housing is increasingly stretched, says report

Patrick Eve, Director and Head of Savills Oxford

House prices in Oxford are currently 23.8 per cent above the 2007/08 peak, and have increased 12.1per cent in the past 12 months, according to Savills indices based on Land Registry data.

A new report launched by Savills, says that this price growth, combined with a severe lack of supply has meant affordability is becoming increasingly stretched in the city.

Demand from local buyers is ever present thanks to Oxford’s diverse economy and major employers at the two universities and city hospitals. Excellent links with the capital contribute to Oxford being one of the strongest housing markets in the country.

Yet, this presents a series of challenges ranging from young families being priced out of the city to local businesses struggling to attract and maintain staff.

Patrick Eve, Director and head of Savills Oxford office explains, “Supply of new homes in Oxford is severely lacking. Only 70 were built in the city in 2013/14, none of which were affordable. Although the historic centre, flood plain and Green Belt all constrain potential growth, this is a particularly low level of building.

“In addition to land in general being scarce, other uses also compete for it. The economic expansion of the city depends on new commercial space, so potential residential development sites are also in competition with office and laboratory space. Further sites may be allocated for student housing with the aim of freeing up family homes tenanted by student groups.

Mr Eve continues, “Most development in the past five years has leapfrogged the Green Belt to the county towns such as Bicester, Didcot and Witney . And it is these locations where planning policy and market conditions will allow for the greatest development.

“A large urban extension at Didcot – Great Western Park – has delivered over 500 homes as of March 2014. A further 240 per annum are set to be completed there in the next ten years.

“Looking ahead, two large edge of city sites are set to deliver homes in the next five years, Barton Park (900 units) and Northern Gateway (up to 500).

“If Oxford is to be an attractive alternative for businesses and employees, it must provide more new affordable housing across a range of tenures.”

 

 
 

Key contacts

Paul Jarman

Paul Jarman

Head of Western Region
Residential

Savills Bath

+44 (0) 1225 474 543

+44 (0) 1225 474 543