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Under the skin of the letting market

Here we share news and views on both the local letting market in & around Oxfordshire and all planned and recent legislation.

Oxford among the top ten cities for buy-to-let investors

Oxford skyline

Oxford is one of the best places in the country to invest in buy-to-let properties, according to a recent report.

Research by HSBC has shown that the city is the seventh best potential region in the country to invest in the housing market, with an average house price of £254,514 and annual rent of £17,868 which means landlords can expect a potential gross rental yield of 7.02%. Oxford features above Portsmouth, Liverpool and Cambridge as one of the top ten rental property spots. Southampton came top with Northern cities such as Hull, Blackpool and Manchester completing the upper half of the list. The report suggests that many of the best buy-to-let areas have relatively low property prices and strong demand from university students and young professionals.

Pete Dockar, head of mortgages at HSBC, said “Landlords are reaping the benefits as young professionals say goodbye to Capital living in favour of more affordable commuter towns. House prices in these locations – while still out of reach for many first time buyers – are relatively affordable for landlords investing in property and the demand from young professionals has pushed up rents and driven up the returns.”

Oxford stands alone as the only area in HSBC’s top ten to go over the £200,000 mark for the average sales price. Applicants in Oxford outweigh available rental properties significantly; fuelled by professionals and young families unable to get on the property ladder. As well as the constant supply of short term visiting academics, medics and professionals working at the Science Park south of the city.

The imbalance of supply and demand pushes sales prices higher and when this happens it affects the yield: if the price rises relatively more than the rent, then the yield drops. Successful investors are likely to pursue the capital gains from long term rises in house prices additional to the rental income and therefore choosing a property with the right balance of immediate income versus future capital values is important. The trick is to know where to look, and of course we can help – with 40 plus years experience in the Oxfordshire rental industry and countless buy-to-lets under our belt!