In the first quarter of 2024 (Jan-Mar) the Oxfordshire lettings market behaved similarly to the previous few years. Demand has remained higher than supply, although the gap has narrowed: nationwide there are a fifth more homes available for rent than a year ago, though supply remains below pre-pandemic averages1. Generally, the view from across our nine offices is that fewer applicants are desperately taking properties unseen or offering over the asking rent. There is a calmer feeling, although many properties – particularly 1- and 2-bedrooms – continue to let very quickly. For example, a 2-bedroom house in Banbury at £1,2002 which was recently listed at 10:30am and let by 5pm the same day (main photo).
Rents are holding
A recent report from Zoopla stated that nearly all private rented homes in the South East are in areas with average rents over £1,000pcm, compared to less than half in 2020. This is supported by our offices across the county. Rents are either holding or continuing to increase, and price reductions are only necessary on larger, ‘out of season’ homes or where the condition of the property isn’t top notch. The location and size will always influence rent, but the condition and quality of a property remain vital factors to consider, and it is wise to seek advice from a reliable local agent when rent setting.
Location, location, location
As mentioned, the start of the year is not typically the market for family homes. However, some of our offices have reported strong demand for larger homes purely based on their location. Families continue to move out of London (often letting out their home there while they rent here) and west Oxfordshire remains a popular area with its countryside properties and good schools.
Our Headington office has let multiple homes to people whose top priority is to be able to walk, cycle, or take the bus to work. For example, a 5-bedroom house in Iffley Village at £2,625, which let on the first viewing to a family who wanted to be in East Oxford (photo above). Other examples of location being the primary requirement can be found in Table 1.
Great expectations
With premium rents come premium expectations and if the property is in great condition, it should achieve a strong rent. For example, a 2-bedroom house in Jericho recently underwent a full upgrade and relet at a 34% rent increase (photo below). Of course, many landlords and investors are feeling the impact of the cost-of-living crisis, but improving a property doesn’t necessarily require a full internal upgrade. Across most of the county we have seen landlords agreeing to small improvements, such as redecoration or new flooring. A good agent will be able to provide bespoke advice within your budget.
Moving to fully managed
Higher tenant expectations can often lead to increased demands. Several offices have reported landlords switching from self-managed to a fully managed service because of the conflict experienced at the end of an otherwise stress-free tenancy. Tenants also expect maintenance requests to be dealt with immediately once reported. This can be challenging if a self-managed landlord doesn't have a variety of trusted contractors available on-call.
Letting out for a shorter term
In Oxford, property owners’ appetite for short lets has increased as they seek the lucrative rents and flexibility of shorter tenancies (a few months at a time) without the stress of holiday lets with their high turnover and lack of tenant referencing. In Woodstock, there has been an increase in landlords moving away from Airbnb-style letting following the introduction of controlled parking zones last summer3. For example, a 2-bedroom cottage in the town centre had operated as a holiday let for years, but a reduction in bookings over the last year due to the lack of available parking permits has encouraged the landlord to switch to longer-term letting (photo below).
From renting to home ownership
The high mortgage rates of 2022-23 made it harder for tenants to move from renting to home ownership. However, mortgage rates dropped in the second half of 20234 and Q1 of 2024 saw a small increase in the number of tenants terminating their contract early in order to buy compared to last year. Numbers have been higher in areas with a lot of new build property as the developers offer deals such as free legal fees or a contribution towards stamp duty. At renewal, some tenants are also seeking the flexibility of a break clause as they intend to buy in the near future. Furthermore, our Inspired Sales division has noticed an increase in enquiries from first time buyers.
Locking in
On the other hand, there’s a cohort of tenants who want the stability of a longer tenancy, often tying in with a fixed-period work contract. Generally, younger tenants seek a more flexible term as their plans may change, whereas the more mature tenants want the commitment of a longer tenancy.
Work from home and pets
Applicants requiring space to work from home tend to want village properties, though this usually comes with questions about broadband speeds and running costs of, typically, older properties. These countryside properties have also been attracting applicants with pets this quarter. Although it is not (yet) law that a landlord cannot unreasonably deny a tenant’s request for a pet, we would advise that landlords be open to them as it’s becoming more common. Under the Tenant Fees Act 2019 it is possible to charge a reasonably higher rent for a let with a pet. For example, the landlord of a 2-bedroom house in Banbury was prepared to change their mind and accept a good quality applicant with a dog at a slightly higher rent.
Evaluating options
Across the county our offices have had enquiries from prospective landlords who are considering letting out their property for a variety of reasons: downsizing, moving overseas, taking a sabbatical to travel, inheriting, a failed sale. We are always happy to talk through the process, discuss options for short or long letting, and provide a valuation. Email our team at info@finderskeepers.co.uk
Larger groups are back!
As pandemic factors ease, our Shared Lettings division has seen a return to larger groups of students looking to live together. Not only that, but they are more committed to their courses; our team let the majority of their property portfolio before Christmas for tenancies starting in autumn 2024. This level of demand had not been seen since pre-2020.
*NEWSFLASH*
At the time of going to print, the government has promised changes to the Renters Reform Bill to ease concerns over its anti-landlord bias. It plans to table further amendments in early April5.
1. Zoopla’s UK Rental Market Report, March 2024
2. All rents are marketing rents and per calendar month
3. https://www.oxfordshire.gov.uk/residents/roads-and-transport/parking/where-park/new-parking-schemes
4. https://www.thetimes.co.uk/money-mentor/mortgage-property/mortgage-rates-uk-news-will-they-go-down
5. https://www.lettingagenttoday.co.uk/breaking-news/2024/3/changes-to-renters-reform-bill-after-easter
