Property Prices: Housing shortage pushes costs up

Banbury Cake: Estate agent Graham McDonald believes a shortage of housing in Oxford has pushed prices up Estate agent Graham McDonald believes a shortage of housing in Oxford has pushed prices up

AVERAGE house prices in Oxfordshire have hit their highest level since the economic downturn.

Figures from the Land Registry showed the average price for properties sold in May was £241,290, less than £4,000 below the same month in 2008.

Property experts said a shortage of homes for sale in sought-after areas of Oxford had pushed up prices, but that buyers faced a much harder task in getting mortgages since the crash.

Estate agent Graham McDonald, of Kemp & Kemp, said: What has kept Oxford prices up has really been a lack of supply. Despite the economy prices have gradually crept up.

“In places like Abingdon and Didcot, where more houses have been built, prices have not risen to the same level.”

Prices were also buoyed by a move by wealthier people towards urban living, he said.

And he added: “Even in the less expensive parts of Oxford people are keen to buy. Some of it is school catchment areas, and some of it is not wanting to commute, or not wanting to drive their children to school.”

Robin Swailes, director of North Oxford Property Services, in Jericho, believed the recovery of prices in Oxford started 14 months ago.

He said: “It’s down to continued demand, a lack of stock and buoyant local economy.”

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Nigel Wild, president of Oxfordshire Chamber of Commerce, added: “The economy is pretty buoyant in Oxfordshire, and I think house prices reflect that.”

Ronnie Van der Ploeg, of Savills, said: “The frustration for buyers is poor stock levels.

“There are never enough for sale.

“Oxford draws people in because of the schools and business parks. People move in but there are not huge levels of stock, so prices rise.”

Mark Charter, of Carter Jonas, said: “Prices in prime locations have raced ahead of the bottom end of the market. The Oxford economy is good and unemployment is relatively low.”

The economic downturn started in December 2007 and by January 2009, the UK had officially entered recession.

This year it entered recession once more as the feared “double dip” became reality.

But what has also changed since 2007 is the availability of mortgages.

Amanda Thomas, director of Orange Frog Mortgages in Abingdon, said five years ago people could obtain 100 per cent mortgages worth up to seven times their income.

Now virtually no-one can obtain a home loan with less than a 10 per cent deposit and it was a struggle to obtain four times an annual wage.

She added: “If you want a 90 per cent mortgage now, the rates will be higher and you have to have a perfect credit history as well as a good income. Realistically, people looking to buy need a 15 per cent deposit as the rates will be much better.”

And obtaining a mortgage has also become more difficult as people’s incomes struggle to keep pace with inflation.

According to the Office for National Statistics, in 2007 the average annual wage for a senior professional in Oxfordshire was £28,155. By 2011 it was, £31,238, a rise of less than 2.2 per cent a year. Meanwhile, rents in Oxfordshire have risen 20 per cent in the past five years due to increasing demand.

Frank Webster, director of Summertown-based property rental specialists Finders Keepers, said: “Due to the lack of money, people can’t buy and are having to rent. As well as having to get a deposit together, there is a lot of uncertainty over interest rates.”

The latest Land Registry figures, based on completed sales, put the average Oxfordshire house price at £241,290 in May, up 0.8 per cent on the previous month. The last time prices were as high was August 2008, when the average was £241,334.

  • A new study lists Oxford as the second least affordable local authority district in the country for first-time buyers.

The study from the Halifax bank found nationally the share of UK towns and cities that are affordable to first-time buyers was at its highest in a decade due to the sluggish housing market.

But it highlighted a widening North-South divide and said in Oxford homes cost 7.6 times average earnings – making it the second least affordable place behind Brent, in London.

Oxford was the only council district outside London to feature in the list of the 10 least affordable places to buy property.

Comments (14)

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9:47am Mon 16 Jul 12

Dilligaf2010 says...

It's not housing shortage that pushes prices up, it's greed.
It's not housing shortage that pushes prices up, it's greed. Dilligaf2010

9:57am Mon 16 Jul 12

Lord Palmerstone says...

Dilligaf2010 wrote:
It's not housing shortage that pushes prices up, it's greed.
Well Dilly, you're obviously not greedy.So can we meet offline and you sell me an ounce of gold for £100? Splendid, good man, your place or mine?
[quote][p][bold]Dilligaf2010[/bold] wrote: It's not housing shortage that pushes prices up, it's greed.[/p][/quote]Well Dilly, you're obviously not greedy.So can we meet offline and you sell me an ounce of gold for £100? Splendid, good man, your place or mine? Lord Palmerstone

10:12am Mon 16 Jul 12

A34North says...

Dilligaf2010 wrote:
It's not housing shortage that pushes prices up, it's greed.
Dilly 'my friend' that really is a silly statement you have made.
[quote][p][bold]Dilligaf2010[/bold] wrote: It's not housing shortage that pushes prices up, it's greed.[/p][/quote]Dilly 'my friend' that really is a silly statement you have made. A34North

10:32am Mon 16 Jul 12

Dilligaf2010 says...

I see a few people disagree with me, obviously sold properties in the past at overly inflated prices, in order to move up the ladder with minimal extra expense.
I see a few people disagree with me, obviously sold properties in the past at overly inflated prices, in order to move up the ladder with minimal extra expense. Dilligaf2010

12:15pm Mon 16 Jul 12

Lord Palmerstone says...

Dilligaf2010 wrote:
I see a few people disagree with me, obviously sold properties in the past at overly inflated prices, in order to move up the ladder with minimal extra expense.
So right DG, I well recall selling my 2 bed terrace in James Street Cowley for £850, 000 to buy my current pile off the Woodstock Road. Now, back to the ounce of gold.....
[quote][p][bold]Dilligaf2010[/bold] wrote: I see a few people disagree with me, obviously sold properties in the past at overly inflated prices, in order to move up the ladder with minimal extra expense.[/p][/quote]So right DG, I well recall selling my 2 bed terrace in James Street Cowley for £850, 000 to buy my current pile off the Woodstock Road. Now, back to the ounce of gold..... Lord Palmerstone

1:18pm Mon 16 Jul 12

Andrew:Oxford says...

I've said many times before, but it's extra-ordinarily easy.

All that needs to be done is for the 1200 new homes to be built in "New Barton" to be 100% owner-occupier.

A simple 25-year restrictive covenant prohibiting private leasing or renting would render the properties un-mortgageable and unissurable by landlords (as would the risk of forfeiture of the homes by cash buyer landlords).

This would give many working people throughout Oxford an opportunity to move out of private lets and social housing and join a stable community of home owners.
I've said many times before, but it's extra-ordinarily easy. All that needs to be done is for the 1200 new homes to be built in "New Barton" to be 100% owner-occupier. A simple 25-year restrictive covenant prohibiting private leasing or renting would render the properties un-mortgageable and unissurable by landlords (as would the risk of forfeiture of the homes by cash buyer landlords). This would give many working people throughout Oxford an opportunity to move out of private lets and social housing and join a stable community of home owners. Andrew:Oxford

1:20pm Mon 16 Jul 12

sparky123456 says...

Dilly isn't wrong. Here's an example. I saw a 2 bed in New High St Headington on the market for £310k. I did my research via land registry and zoopla and found that at the time (2 years ago) no house of similar style had ever sold for more than £270k and the average price for a property of that style between 2006-2010 was £245k. I asked the agent if the vendor would consider offers in the region of £260k and was flatly refused even a viewing. When I asked why the asking price was way higher than average I was told it was because the property had a driveway. So the agent values a driveway at £60k??! after more research i discovered the vendor had bought the property at the height of the market in 2007 and paid well over the odds at about £260k so obviously they felt entitled to make profit and the agent was encouraging them to do so!!! that's pure greed and the house sat on the market for at least 18 months but eventually some idiot bought it for approx £295k. this is the same story across oxford, i've been watching a property in East Oxford for a while, it's been on and off the market for 2 years now. Originally it's asking price was £270k obviously priced with a view of the previously higher cap on stamp duty for first time buyers. Now abolished it's had a lick of paint gone on with a different agent and is priced at £300k!!
Dilly isn't wrong. Here's an example. I saw a 2 bed in New High St Headington on the market for £310k. I did my research via land registry and zoopla and found that at the time (2 years ago) no house of similar style had ever sold for more than £270k and the average price for a property of that style between 2006-2010 was £245k. I asked the agent if the vendor would consider offers in the region of £260k and was flatly refused even a viewing. When I asked why the asking price was way higher than average I was told it was because the property had a driveway. So the agent values a driveway at £60k??! after more research i discovered the vendor had bought the property at the height of the market in 2007 and paid well over the odds at about £260k so obviously they felt entitled to make profit and the agent was encouraging them to do so!!! that's pure greed and the house sat on the market for at least 18 months but eventually some idiot bought it for approx £295k. this is the same story across oxford, i've been watching a property in East Oxford for a while, it's been on and off the market for 2 years now. Originally it's asking price was £270k obviously priced with a view of the previously higher cap on stamp duty for first time buyers. Now abolished it's had a lick of paint gone on with a different agent and is priced at £300k!! sparky123456

2:34pm Mon 16 Jul 12

Captain J says...

It's not greed that pushes up prices, it's demand. Of course, greed could quite possibly form a part of that demand!

So technically I both agree and disagree with Dilly.
It's not greed that pushes up prices, it's demand. Of course, greed could quite possibly form a part of that demand! So technically I both agree and disagree with Dilly. Captain J

2:48pm Mon 16 Jul 12

train passenger says...

The only experts quoted in this article are those who stand to gain the most from propping up the housing market (estate agents and mortgage brokers). If you take out the top end of the Oxford market, prices really have not been going up at all in Oxford for some time now. The top end of the market is still a bubble, yes, with gross rental returns of below 4%. Good luck to those who want to buy into that.
The only experts quoted in this article are those who stand to gain the most from propping up the housing market (estate agents and mortgage brokers). If you take out the top end of the Oxford market, prices really have not been going up at all in Oxford for some time now. The top end of the market is still a bubble, yes, with gross rental returns of below 4%. Good luck to those who want to buy into that. train passenger

3:21pm Mon 16 Jul 12

A34North says...

Dilligaf2010 wrote:
I see a few people disagree with me, obviously sold properties in the past at overly inflated prices, in order to move up the ladder with minimal extra expense.
Now now Dilly you are being silly. Like many I have sold houses at the current market value and moved into better properties worked hard and moved again. There will come a time Dilly when I will not want to clean the pool or mow the grass and that is when someone else can take over. It is amazing what you can achieve if you work hard! surely you will have taught this ethos to your clients when in practice Dilly?
[quote][p][bold]Dilligaf2010[/bold] wrote: I see a few people disagree with me, obviously sold properties in the past at overly inflated prices, in order to move up the ladder with minimal extra expense.[/p][/quote]Now now Dilly you are being silly. Like many I have sold houses at the current market value and moved into better properties worked hard and moved again. There will come a time Dilly when I will not want to clean the pool or mow the grass and that is when someone else can take over. It is amazing what you can achieve if you work hard! surely you will have taught this ethos to your clients when in practice Dilly? A34North

3:30pm Mon 16 Jul 12

A34North says...

sparky123456 wrote:
Dilly isn't wrong. Here's an example. I saw a 2 bed in New High St Headington on the market for £310k. I did my research via land registry and zoopla and found that at the time (2 years ago) no house of similar style had ever sold for more than £270k and the average price for a property of that style between 2006-2010 was £245k. I asked the agent if the vendor would consider offers in the region of £260k and was flatly refused even a viewing. When I asked why the asking price was way higher than average I was told it was because the property had a driveway. So the agent values a driveway at £60k??! after more research i discovered the vendor had bought the property at the height of the market in 2007 and paid well over the odds at about £260k so obviously they felt entitled to make profit and the agent was encouraging them to do so!!! that's pure greed and the house sat on the market for at least 18 months but eventually some idiot bought it for approx £295k. this is the same story across oxford, i've been watching a property in East Oxford for a while, it's been on and off the market for 2 years now. Originally it's asking price was £270k obviously priced with a view of the previously higher cap on stamp duty for first time buyers. Now abolished it's had a lick of paint gone on with a different agent and is priced at £300k!!
Sparky, its nice to know you would not take a penny more than what 'you' believe to be the market value for your house. Yeah right!
[quote][p][bold]sparky123456[/bold] wrote: Dilly isn't wrong. Here's an example. I saw a 2 bed in New High St Headington on the market for £310k. I did my research via land registry and zoopla and found that at the time (2 years ago) no house of similar style had ever sold for more than £270k and the average price for a property of that style between 2006-2010 was £245k. I asked the agent if the vendor would consider offers in the region of £260k and was flatly refused even a viewing. When I asked why the asking price was way higher than average I was told it was because the property had a driveway. So the agent values a driveway at £60k??! after more research i discovered the vendor had bought the property at the height of the market in 2007 and paid well over the odds at about £260k so obviously they felt entitled to make profit and the agent was encouraging them to do so!!! that's pure greed and the house sat on the market for at least 18 months but eventually some idiot bought it for approx £295k. this is the same story across oxford, i've been watching a property in East Oxford for a while, it's been on and off the market for 2 years now. Originally it's asking price was £270k obviously priced with a view of the previously higher cap on stamp duty for first time buyers. Now abolished it's had a lick of paint gone on with a different agent and is priced at £300k!![/p][/quote]Sparky, its nice to know you would not take a penny more than what 'you' believe to be the market value for your house. Yeah right! A34North

6:25pm Mon 16 Jul 12

Andrew:Oxford says...

sparky123456 wrote:
Dilly isn't wrong. Here's an example. I saw a 2 bed in New High St Headington on the market for £310k. I did my research via land registry and zoopla and found that at the time (2 years ago) no house of similar style had ever sold for more than £270k and the average price for a property of that style between 2006-2010 was £245k. I asked the agent if the vendor would consider offers in the region of £260k and was flatly refused even a viewing. When I asked why the asking price was way higher than average I was told it was because the property had a driveway. So the agent values a driveway at £60k??! after more research i discovered the vendor had bought the property at the height of the market in 2007 and paid well over the odds at about £260k so obviously they felt entitled to make profit and the agent was encouraging them to do so!!! that's pure greed and the house sat on the market for at least 18 months but eventually some idiot bought it for approx £295k. this is the same story across oxford, i've been watching a property in East Oxford for a while, it's been on and off the market for 2 years now. Originally it's asking price was £270k obviously priced with a view of the previously higher cap on stamp duty for first time buyers. Now abolished it's had a lick of paint gone on with a different agent and is priced at £300k!!
It all depends where you are in Oxford when it comes to the value of a drive/garage/off-str
eet parking.

In a scheme heavily promoted by the City Council, recent developments in Central Oxford have sold the parking space separately to the apartment. The current going rate is £30K for a single space and £40K for a double-length space.
[quote][p][bold]sparky123456[/bold] wrote: Dilly isn't wrong. Here's an example. I saw a 2 bed in New High St Headington on the market for £310k. I did my research via land registry and zoopla and found that at the time (2 years ago) no house of similar style had ever sold for more than £270k and the average price for a property of that style between 2006-2010 was £245k. I asked the agent if the vendor would consider offers in the region of £260k and was flatly refused even a viewing. When I asked why the asking price was way higher than average I was told it was because the property had a driveway. So the agent values a driveway at £60k??! after more research i discovered the vendor had bought the property at the height of the market in 2007 and paid well over the odds at about £260k so obviously they felt entitled to make profit and the agent was encouraging them to do so!!! that's pure greed and the house sat on the market for at least 18 months but eventually some idiot bought it for approx £295k. this is the same story across oxford, i've been watching a property in East Oxford for a while, it's been on and off the market for 2 years now. Originally it's asking price was £270k obviously priced with a view of the previously higher cap on stamp duty for first time buyers. Now abolished it's had a lick of paint gone on with a different agent and is priced at £300k!![/p][/quote]It all depends where you are in Oxford when it comes to the value of a drive/garage/off-str eet parking. In a scheme heavily promoted by the City Council, recent developments in Central Oxford have sold the parking space separately to the apartment. The current going rate is £30K for a single space and £40K for a double-length space. Andrew:Oxford

10:21am Tue 17 Jul 12

Lady Penelopee says...

It IS demand though...

I bought an Oxford newbuild at the peak of the market (my HOME, not an investment), and sold for a 4% loss 5 years later.

We nearly bought in Witney, and a friend of mine that bought a similar newbuild in Witney at the same time now can't move, as it's worth nearly 30% less than when they bought it.

Ultimately, we may have made a small loss on the sale, but when you include buying/selling costs, and what we would have paid in rent and letting agent fees, we actually made a considerable saving!
It IS demand though... I bought an Oxford newbuild at the peak of the market (my HOME, not an investment), and sold for a 4% loss 5 years later. We nearly bought in Witney, and a friend of mine that bought a similar newbuild in Witney at the same time now can't move, as it's worth nearly 30% less than when they bought it. Ultimately, we may have made a small loss on the sale, but when you include buying/selling costs, and what we would have paid in rent and letting agent fees, we actually made a considerable saving! Lady Penelopee

2:24pm Wed 18 Jul 12

Severian says...

People who sell houses are not greedy, and people who buy them are not idiots. This is a free market and both parties are able to make their own decisions.

The reason prices are high is supply and demand, and demand is higher than supply.

The way to bring house prices down is to CPO a large swathe of land and build hundreds of houses that are sold off at cost to private buyers with covenants to prevent letting out. But that is never going to happen with a Tory government.

Otherwise move up to Bicester where it's a lot cheaper to live.
People who sell houses are not greedy, and people who buy them are not idiots. This is a free market and both parties are able to make their own decisions. The reason prices are high is supply and demand, and demand is higher than supply. The way to bring house prices down is to CPO a large swathe of land and build hundreds of houses that are sold off at cost to private buyers with covenants to prevent letting out. But that is never going to happen with a Tory government. Otherwise move up to Bicester where it's a lot cheaper to live. Severian

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