Property Focus - Issue 4 (Oxford)

ISSUE 4

The magazine for property professionals

Apr - June 2016

Oxford - Take a look around the city of dreaming spires Hot Topic

Will recent tax changes see the end of the buy-to-let boom?

Plus!

Get all the latest stats, news and views from the property market.

W

elcome to the spring issue of Property Focus – our quarterly magazine for landlords, letting agents and property enthusiasts.

In this edition, we take the short trip to Oxford to cast our spotlight on the city, as well as rounding up all the latest industry news, statistics and issues.

Plus, for a chance to win £50 to spend at Amazon, simply answer the following question:

What are residents and natives of Oxford commonly known as?

Email your answer to propertyfocusmag@gmail.com or tweet it to @rentguard for a chance to win!

One lucky winner will be chosen on 30th June – good luck!

Richard Williams – Editor propertyfocusmag@gmail.com

Oxford University, circa 14th Century

OUR SURVEY SAYS...

The majority of UK tenants are families A new survey by the RGA Insurance Group has revealed that the most common type of tenant for UK landlords is families.

46.1% of landlords revealed that families were living in their buy to let properties, while 23.1% said they

let their properties to students.

A further 23.1% of respondents revealed that working professionals were renting from them.

The landlord insurance specialists asked customers the question, ‘Are the majority of your tenants families, students, working professionals or other?’

7.7% chose the option of other.

“The results show that the buy to let market is continuing to experience growth as a greater number of families are renting now than ever before. The changes in stamp duty and tax have not had the intended effect of slowing down the sector, which is positive,” says James Castell, director of RGA.

NOSY NEIGHBOUR

In each issue we take a sneaky look at what’s been going on in rental properties across the UK Oxford landlord ordered to pay £10,500 for unlicensed HMO

Barking landlord fined nearly £40,000 for breaching letting licence

An Oxford landlord has been fined a total of £10,500 for the poor condition of his five bedroom House of Multiple Occupancy (HMO).

A landlord who had a licence to house just one family in her three bedroom house, was found to be letting it to four times as many households.

Council officers inspected the house after concerns were raised and found 10 people living in the dirty house, including a young mum with her seven-week old baby.

The four families included a mother and her 14 year old daughter, a middle aged couple and two single men.

The property was unsafe and did not meet the standards required under HMO management rules.

The bathroom was damp and mouldy, the kitchen was greasy with a broken cooker and broken units and the back door was insecure.

The landlord initially pleaded not guilty but later changed his plea and was fined £4,000 for breaching housing legislation by failing to register the HMO. He was charged another £4,000 for failing to maintain the property at an acceptable level.

He was also ordered to perform 250 hours of community service and pay the city council’s costs of £2,500.

The landlord pleaded guilty to 14 offences under the Housing Act 2004 and House of Multiple Occupation Regulations 2006. She was fined a total of £39,240 as well as council costs of £256.41 and a victim surcharge of £120.

Councillor Andrew Baikie, said the council will punish landlords who violate the law.

“Our licensing scheme is designed to protect tenants from landlords who overcrowd their properties in a bid to maximise their profits,” he said. “This large fine sends a stern warning to other landlords that magistrates are seeing through their stories.”

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Apr 2016

HOT TOPIC In each issue we look at both sides of the industry’s hottest topics.

Will the recent tax and stamp duty changes see the end of buy-to-let as an attractive investment?

Yes

Responding to calls for action over a shortage of housing and the problems facing first time buyers in England and Wales, the Government has announced a number of measures looking to slow down the private rented sector.

Last year, backed by the Bank of England, Chancellor George Osborne’s first move was to remove the higher-rate tax relief on mortgage interest repayments. Over three years from 2017, Mr Osborne will do away with reliefs of up to 45% on mortgage interest costs, restricting them to the basic 20% rate of income for all landlords.

From April 1st this year, landlords can also no longer claim a 10% annual ‘wear and tear’ allowance on furnished rental properties. They will instead only be able to claim back costs they have actually encountered in replacing furniture and fittings.

Landlords were dealt a further blow, when the Government also introduced an additional 3% stamp duty on any property bought as a buy-tolet or as a second home.

With landlords’ profit margins squeezed even further, studies have suggested that some 500,000 buy-to-let properties will be sold off over the next 12 months.

“Once again the Chancellor has demonstrated his

quite clear disdain for people making money out of the property market,” says James Ward, partner and head of private clients at law firm Seddons.

According to other reports, confidence in the sector is now at its lowest ebb since the days of the banking crisis.

“Landlords could be forgiven for feeling a little deflated at the moment and its worrying to see this may motivate many to reconsider their investment.

The government’s tax changes appear to be making investing in buy-to-let less attractive because of the seemingly smaller profit margins on offer in the future” Adrian Gill, director of estate agents Your Move and Reeds Rains.

No

The new proposals to cool the buy to let sector have been branded as “a classic case of slamming the stable door after the horse has bolted” by the former chairman of the Royal Institution of Chartered Surveyors.

in January, according to the Council of Mortgage Lenders.

Whilst some landlords will undoubtedly be worse off, particularly those with large portfolios and a considerable amount of debt, some experts are quick to point out that if you remain a basic rate taxpayer, there will be no change.

Confidence in the sector remains high according to new research from Nottingham Building Society, with only one in seven landlords scrapping plans to add to their portfolio despite the new rules taking effect.

Others have suggested that these extra costs will simply be passed on to tenants in the form of higher rents, and it is they, rather than landlords, that will suffer as a result of the changes.

Indeed, a recent survey by Spareroom.co.uk revealed that almost half of landlords are set to increase their rents in 2016 in an attempt to counteract forthcoming changes.

“The biggest losers from today’s statement are tenants who will now find it even harder to get the accommodation they want at a price they can afford,” says Alan Ward, chairman of the Residential Landlords Association.

“The government should be encouraging landlords to invest, not doing everything they can to discourage them,” Ward adds.

Many landlords have been flocking to beat the changes, by purchasing new properties before 1st April, which shows that confidence in the sector is still high. There was a 22% surge in the number of mortgages issued to prospective private landlords

Many buy-to-let landlords have also found a way around the changes by investing in properties through companies instead of in their own names.

“The buy-to-let market remains strong despite a period of uncertainty as lenders and customers assessed their options” Ian Gibbons, senior Mortgage Broking Manager at Nottingham Mortgage Services.

CITY SPOTLIGHT

CITY SPOTLIGHT

In each issue we shine our spotlight on a different part of the UK, focussing on what it has to offer everyone from property investors to casual day trippers.

Oxford

Introduction

Employment

Located in the South East of England, Oxford is one of the most photographed, filmed and written about cities in the world. It is notable for its beautiful buildings, with the city demonstrating examples of every English architectural period since Saxon times.

Since the early 1900s, Oxford has been an important centre of motor manufacturing with Morris Motors established in the city. The key producer of Mini cars, now owned by BMW, is also located in the suburb of Cowley.

Sometimes known as the “city of dreaming spires�, a term coined by poet Matthew Arnold in the 1800s, it has a population of around 160,000.

Oxford has a burgeoning reputation for digital innovation, with Digital Oxford and several startups including Passle, Brainomix, Labstep also based in the city. It also plays host to world-class companies such as Oxford Instruments, Sophos and RM Learning.

Connections Oxford has three main railway stations running regular services to London Paddington (one hour approx) as well as Manchester, Birmingham and Edinburgh, among others.

In addition to the larger airports in London, the city is also served by London Oxford Airport in nearby Kidlington.

There is long established history of brewing in Oxford, dating back to the 16th century when it was arguably the most popular trade in the city. There were breweries in Brewer Street and Paradise Street, near the Castle Mill Stream and several of the colleges also had their own breweries, one of which, Brasenose was open until 1889.

The city has the second highest percentage in the UK of people cycling to work (after Cambridge).

OXFORD

DID YOU KNOW? Residents and natives of Oxford are known as Oxonians.

Education The city is synonymous with Oxford University which dates back as far as the 12th century (see page 17 for more on the university). Oxford graduates are highly sought after by leading companies in many different fields, especially the sciences.

Property investment Residential property values in Oxford have surged nearly four times higher than gains seen in the wider UK and are even a fraction above those displayed in London.

The abundance of colleges across the city and an estimated student population of around 25,00030,000 at any one time, mean strong investment opportunities in this sector for landlords.

With average house prices around 12 times that of average annual earnings, affordability in the city is stretched. Whilst this is bad news for those looking to get on the property ladder, it makes for a consistently strong rental sector and good opportunities for buy to let investors.

Tourism

Average rents in the city are around ÂŁ1,200 a month, with yields of between 4.5-5% to be found.

Oxford is a major draw for tourists, mainly due to its parks and historical buildings associated with the University which also make it a popular location for film and television crews.

The city centre also offers many shops, high quality restaurants and theatres (see pages 14 & 15 for more places of interest).

CITY SPOTLIGHT

“There is a mixture of investors buying up student accommodation, while house building is constrained by the surrounding greenbelt,� says Richard Donnell, director of residential research at Hometrack.

The north of the city may mean a longer commute into London, however the new Oxford Parkway station will reduce journey times to the capital and see prices rocket in the area.

DID YOU KNOW? The comma used before a conjunction (such as “and” or “or”) in a list of three or more items is known as the Oxford Comma.

New homes are already being built nearby, with a 22-apartment gated waterside development at Kidlington, 10 minutes from the station with prices ranging from £165,000 to £249,000.

The advent of Crossrail is also set to make Henley in Oxfordshire a property hotspot by cutting commuting times to London.

“The new lines will enable buyers to look from as far as Cookham and Marlow in the east, to Pangbourne and Goring in the west,” says Nicholas Brown of Knight Frank estate agents.

Compulsory landlord licensing scheme It was recently reported that Oxford City Council plans to extend its house in multiple occupation (HMOs) licensing scheme to include all types of rented properties.

There are an estimated 15,000 rented properties in the city, with around 10,000 not currently covered by the scheme.

The scheme aims to ensure that rental properties meet electric, fire and gas safety standards and are genuinely well maintained, with regular inspections from the council and fines for landlords who do not meet required standards.

Regeneration Although crime rates are low in the vast majority of suburbs and villages, there are pockets of social deprivation and many people may be surprised at the inequality within a city such as Oxford.

The ‘2026’ regeneration project which commenced in 2009 aims to transform deprived areas, extend opportunities and raise aspirations across the city over the next ten years. The project aims to provide thousands of new affordable homes across the city.

As part of the project, a new 150 bed hotel, restaurant, deli and microbrewery is to be created in the Paradise Street area of the city centre.

OXFORD

Oxford – the facts and figures Get the lowdown on the city with our handy infographics

PROPERTY RENTS BY BEDROOMS (source: home.co.uk) 1 BEDROOM

£1,683 pcm

2 BEDROOM

£1,994 pcm

3 BEDROOM

£1,870 pcm

AVERAGE RENTS BY PROPERTY TYPE (source: home.co.uk) ROOM

£603 pcm

FLAT

£1,952 pcm

HOUSE

£2,449 pcm

AVERAGE CAPITAL GAINS 8.35%

(source: Lendinvest Index)

AVERAGE ASKING PRICE (source: home.co.uk) £604,785

CITY SPOTLIGHT

Twinned with Oxford is twinned with the below cities:

Bonn

Grenoble

Leiden

Germany

France

Netherlands

Tourism Roughly seven million visitors come through the city each year, supporting over 13,000 jobs in Oxford

Population = 160,000 (approx) Did Yo u Know?

Hitler was reporte dly intend ing to use Oxfo rd as his c apital if he conquer e d Eng land , which is one of th e reasons it was not bo mbe d .

OXFORD

PLACES TO VISIT

Oxford is the seventh most visited city in the UK by international visitors. Perhaps most famous for being home to Oxford University and the University Parks, the city has an extensive list of historical attractions to explore.

Blenheim Palace Woodstock, Oxfordshire, OX20 1PP

This monumental country house was built in the early 18th century to celebrate victory over the French in the War of the Spanish Succession. Designated as a UNESCO World Heritage Site in 1987, the Palace sits among more than 2,000 acres of extraordinarily landscaped parks and gardens. Blenheim Palace is also home to the greatest collection of ancient oak trees anywhere in Europe with some up to 900 years old! www.blenheimpalace.com/

Oxford Castle Unlocked New Road, Oxford, OX1 1AY

A guided tour of Oxford Castle is the perfect way to learn about the building’s 1,000 year history as the characters reveal their fascinating stories. The tour involves climbing Saxon St George’s Tower which offers breath taking 360° panoramic views over the city and descending deep underground into the dark atmosphere of the 900 year old crypt – the only surviving remains of St George’s Chapel. www.oxfordcastleunlocked.co.uk/

Oxford Covered Market Market Street, Oxford, OX1 3DZ

Oxford’s world famous covered market is home to numerous traders selling a captivating range of goods. Fresh fruit, vegetables, breads and cakes, meats, cheeses, seafood, fine foods, flowers, leather goods, shoes, watches, jewellery, clothing, gifts, hats and so much more is available! The market is open from 8:30am5:30pm Monday to Saturday and 10am-4pm on Sunday. www.oxford.gov.uk/info/20231/markets/110/oxford_covered_market CITY SPOTLIGHT

Bicester Village 50 Pingle Drive, Bicester, Oxfordshire, OX26 6WD

This famous outlet shopping centre attracts over 6 million visitors a year, according to the Telegraph.

Shoppers can choose from over 130 stores with famous designer brands including Burberry, Armani, DKNY and Gucci to name a few. In addition to the luxury shopping experience, there is a range of dining options offering local specialities and international cuisine. www.bicestervillage.com

Oxford University Oxford, OX1 2JD

A renowned and world leading centre of learning and research, Oxford is the oldest university in the English speaking world.

The university has an impressive 44 colleges and halls, each with their own character and traditions. Famous Oxford alumni include Oscar Wilde, Rosamund Pike and Rupert Murdoch. www.ox.ac.uk/

Oxford University Parks Oxford, OX1 3RF

No matter the season, University Parks always has a great deal to offer. In addition to the natural beauty of the flora and fauna which includes 16 different species of trees, there are a number of points of interest to explore. These include works of art, bridges and pathways, ponds and waterways as well as planted gardens. The Genetic Garden commemorates the contribution to genetics by Professor Cyril Dean Darlington. www.parks.ox.ac.uk/

Oxford University Museum of Natural History Parks Road, Oxford, OX1 3PW

The museum displays many internationally significant natural history specimens including geological and zoological displays. In addition to a lecture theatre which is used by the university’s chemistry, zoology and mathematics departments. Founded in 1860, the building is a stunning example of neo-Gothic architecture and the famous Dodo and dinosaur features attract over 670,000 visitors a year. www.oum.ox.ac.uk/ OXFORD

Famous Residents Oxford has a rich heritage of political, literary and screen stars. Here are a few of the city’s favourite sons and daughters.

Sir Winston Churchill

express.co.uk

Former British Prime Minister Winston Churchill was born in Woodstock, Oxfordshire in 1874. His speeches and radio broadcasts helped inspire British resistance to Adolf Hitler. He led Britain as Prime Minister until victory over Nazi Germany had been secured. Named the Greatest Briton of All Time in a 2002 poll, he is widely regarded as being among the most influential people in British history.

David Cameron

dailystormer.com

Prime Minister David Cameron was born in London in 1966, he attended Brasenose College at Oxford University between 1985 and 1988 where he achieved first-class honours in Philosophy, Politics and Economics. While at Oxford, Cameron was a member of the student dining society the Bullingdon Club, which has a reputation for an outlandish drinking culture and boisterous behaviour.

Emma Watson

mirror.co.uk

Actress, model and activist Emma Watson was born in Paris, but grew up in Oxfordshire. She trained as an actress at the Oxford branch of Stagecoach Theatre Arts, before going on to star in the hugely successful Harry Potter film adaptations.

In 2014, she helped launch the UN Women campaign HeForShe, which calls for men to advocate gender equality.

Nigella Lawson TV chef and food writer Nigella Lawson graduated from the University of Oxford with a degree in medieval and modern languages. She has a string of best-selling cookery books to her name including How To Be A Domestic Goddess and has presented food shows on the BBC, ITV and Channel 4.

pioneerchef.com

Stephen Hawking

Theoretical physicist, cosmologist and author Stephen Hawking was born in Oxford in 1942. He is famous for his ground-breaking scientific theories including those contained in his 1988 book A Brief History of Time. Hawking has a slow-progressing form of motor neurone disease that has gradually paralysed him over the decades, he now communicates using a single cheek muscle attached to a speech-generating device.

telegraph.co.uk

Sir Roger Bannister On 6th May 1954 at Iffley Road track in Oxford, Bannister became the first person to run a mile in under four minutes (at a time of 3 min 59.4 sec). He went on to become a distinguished neurologist and Master of Pembroke College, Oxford, before retiring in 1993.

CITY SPOTLIGHT

dailymail.co.uk

History Oxford University represents 920 years of history and over the centuries it has become entwined with the city.

Many of its colleges, departments and facilities are scattered throughout the city centre. The prestigious institution has educated many notable alumni, including 27 Nobel laureates and 26 British prime ministers.

Did you know?

Oxford University alumni have won a grand total of 158 Olympic gold medals.

Oxford University Oxford is a unique and historic institution and although there is no clear date of when the university was founded, teaching existed at Oxford in some form in 1096 and developed rapidly from 1167 when Henry II banned English students from attending the University of Paris.

More recent developments in the history of the university include academic halls established for women in 1878 and full membership for women to the university in 1920. During the 20th and 21st centuries, Oxford added to its research capacity in the natural and applied sciences, including medicine.

The university is made up of a variety of institutions including 38 constituent colleges and a full range of academic departments which are organised in to four divisions – Humanities, Mathematical, Physical & Life Sciences, Medical Sciences and Social Sciences.

The excellent teaching and learning facilities include the second-largest library in the UK, The Bodleian.

Second only to the British Library, The Bodleian has over 11 million volumes on 120 miles of shelving and is growing at a rate of over three miles of shelving each year!

Oxford University is home to a number of museums and galleries open for free to the public. The Ashmolean Museum, founded in 1683, is the oldest museum in the UK and the oldest university museum in the world. It holds significant collections including works by Michelangelo, Leonardo da Vinci and Picasso.

Not only is Oxford the oldest university in the English speaking world, it is older than the Aztec Empire, Magna Carta, Timbuktu, Genghis Khan and Notre Dame.

Oxford University Press Oxford University became involved in the print trade in approximately 1480 and grew into a major printer of Bibles, prayer books and scholarly works.

The university press department took on the project that became the Oxford English Dictionary in the late 19th century and over the last hundred years, has published children’s books, school text books, music, journals.

Today Oxford University Press (OUP) is the largest university press in the world and the second oldest after Cambridge University Press. OUP has moved into international markets with offices in New York City, US and New Delhi, India.

OXFORD

SALES & RENTAL INDEX Average Rent per Region Overall UK average = £778.20 UK excluding London = £744 (+4.8%) North East = £519 (-2.6%) North West = £636 (-3.2%) Yorkshire and Humber = £618 (+0.8%) East Midlands = £637 (+6.7%) West Midlands = £659 (+2.6%) East Anglia = £793 (+4.4%) Wales = £596 (+3.4%) London = £1,521 (+7.7%) South East = £938 (+6.5%) South West = £865 (+4.0%) (Year on year change)

Average House Price per Region Overall UK average = £191,812 (+7.1%) North East = £97,117 (+0.2%) North West = £114,504 (+2.1%) Yorkshire and Humber = £124,949 (+3.7%)

East Midlands = £138,825 (+4.4%) West Midlands = £144,185 (+6.6%) East Anglia = £217,341 (+8.9%) Wales = £125,665 (+6.8%) London = £530,409 (+13.9%) South East = £266,603 (+10.7%) South West = £198,288 (+6.2%) UK Land Registry (Year on year change)

“I wonder anybody does anything at Oxford but dream and remember, the place is so beautiful. One almost expects the people to sing instead of speaking. It is all like an opera” W.B Yeats

Words

Richard Williams

Design

David Puddicombe

Priya Gill

Miao Yu

We hope you’ve enjoyed the fourth issue of Property Focus, we welcome any feedback or suggestions, please email all correspondence to propfocusmag@gmail.com.

Alternatively you can write to us at 27 Great West Road, Brentford, London, TW8 9BW.