Oxfordshire’s letting market has displayed a more measured pace in January, February and March when compared to the intensity of recent years. Nationally, a modest 11% increase in the number of homes available to rent has been reported1 though this has not been felt uniformly across all nine of our offices in Oxfordshire. Demand continues to exceed supply, despite the gap narrowing over the last year, and as this is unlikely to rebalance in the near future, we anticipate a continued upward pressure on rents (though at a slower rate than the last few years).
Demand dynamics
Rental demand in Q1 is down 8.9% compared to last year2 but remains 56.5% higher than pre-pandemic levels (Graph 1). Overall, demand for rental properties in Oxfordshire remains robust, driven by the county’s strong academic institutions, thriving industry and appealing quality of life. The year-on-year decrease appears to be a result of lower levels of immigration for work and study as well as tenants moving out of the rental market to buy.
- Overseas applicants: We are no longer able to use the Home Office's Landlord Checking Service to verify an applicant's right to rent status if they are mid-application. Status can only be confirmed once they are in possession of their visa and share code, meaning fewer long-lead enquiries.
- Tenants buying: Q1 saw a number of tenants across the county moving out, negotiating break clauses, or surrendering their tenancies with the intention of buying before stamp duty reverted to previous levels. For example, the long-term tenant of a 2-bedroom house in Marsh Gibbon moved out to buy before the tax change. The landlord carried out some minor works and the property relet on the first viewing at a 32% rent increase.
Sources of supply
As well as tenants moving out of rented accommodation (bringing it back to the market), new instructions continue to come from owners letting out their home while they relocate (e.g. for travel or work). There has also been an increase in the number of self-managed landlords looking for our help to secure a good tenant or switching to a fully managed service, possibly ahead of upcoming legislative changes.
Changes in applicants
Applicants have less urgency and are no longer making snap decisions at a viewing. There is a trend of wanting to see everything on the market before deciding – particularly those moving out of London. In central Oxford it has been apparent that applicants won’t rent a house if they don’t need the extra space due to the higher running costs compared to apartments.
Although 1- and 2-bedroom apartments are perennially popular with renters (Photo 1: a 1-bedroom apartment in Summertown at £15503 which let the day after it was listed) some of our offices outside of Oxford noted fewer single applicants looking to rent. Across all property types we continue to see many applicants with pets and – in some areas – we have more landlords accepting pets. The Renters' Rights Bill proposes that landlords will not be able to unreasonably refuse a tenant's request for a pet, however they will be able to require the tenant to obtain a specific pet insurance policy.
Photo 1
Rents continue to increase on premium properties
Rents have grown (Graph 2) albeit at a slower rate than recent years. There has been a feeling in this time that ‘functional is fine’ and the property will let anyway, however the best quality properties always attract quality tenants at the best rents. It is better to budget for incremental improvements than to suddenly need a full upgrade (and not maintaining the property will also impact landlords when they come to sell as they will likely achieve under-market value based on condition). Some examples from Q1:
- Our Bicester office let two 2-bedroom houses in the same street which were advertised one month apart. One was listed at £1,150 and the other, which is finished to a higher standard, was listed at £1,500.
- In Witney the landlord of a 4-bedroom detached property (Photo 2) fully upgraded their property via our in-house renovations division before our lettings team relet it at a 47% rent increase.
The importance of setting appropriate rents
If not top quality, accurate price setting is paramount to finding a great tenant in good time. Our offices reported a degree of price sensitivity in the market, where a variation of £50 pcm can be the difference between securing a great tenant or risking a void period. Adjusting rents can feel alien after years of achieving high rents, but our advice is to be sensible and prepare to be flexible. We are seeing old tactics coming into play where agents are quoting inappropriately high rents to win the business, but the property then goes stale on the market before the price is reduced to a realistic level.
Rent reviews on renewals are done on a property-by-property basis and generally a 4-5% uplift has been achieved, though in some cases landlords are prepared to accept less for the sake of keeping a good tenant who is looking after the property.
Selling at the natural break
Of the landlords who have decided to sell, the motivation has not been due to any concerns around upcoming legislation. The reasoning has generally been to release the money for children or themselves. For example, our Woodstock office had several landlords in recent years who had let their home while they settled into a relocation. This year a few of them have decided to make the move permanent and no longer need to retain their property in Oxfordshire. Where properties have not sold, they have quickly relet, with the long-term plan still being to sell. For example, a 4-bedroom detached house in Summertown at £7,000 (Photo 3) and a 1-bedroom apartment in Witney at £1,050.
Oxfordshire remains a good investment
A report released at the start of the year showed that Oxford remains in the Top 10 UK Residential Investment Cities4. Given the sustained demand and rising rental prices, Oxfordshire presents compelling opportunities for property investors. Investing in this county could yield favourable returns, especially for those catering for the prevalent demand for 1- and 2-bedroom properties. A recent example: a 1-bedroom apartment near Kidlington was acquired by an investor and let promptly to a single professional tenant, providing a 6% gross return.
Changes ahead
The private rented sector is facing some major changes in the Renters’ Rights Bill, but it is our belief that the bill should not pose a threat to good landlords looking longer-term and who use a good managing agent. Great property management remains key to a healthy tenancy and remaining adaptable will be key to navigating the opportunities and challenges which may lie ahead. To quote the famous slogan, “Keep calm and carry on!” and speak to us for honest advice for your property.
1 – Zoopla UK Rental Market Report, Q1 2025.
2 – Internal Finders Keepers data.
3 – All rents are marketing rents and per calendar month.
4 – Top UK Residential Investment Cities Report H2 2024.
