The summer lettings market in Oxfordshire has continued to see properties of all types letting quickly and rents remaining strong. The 1- and 2-bedroom properties are perennially popular with tenants and all nine of our offices reported being inundated with calls upon listing these homes, often agreeing a let within 24-36 hours. Demand for 3+ bedrooms was slightly lower and so the accurate pricing of these properties was key to securing a let. Overall, rents have remained very healthy, and quality of property has remained a top requirement.
Demand keeps rents strong
Where there is very high demand and not enough stock, basic economics will tell you that the price will increase, and this has been observed across our offices this quarter (see graph). Even at renewal, rents are continuing to increase – if the proposed new rent is reasonable – due to a lack of availability of alternative properties. Our Woodstock team listed a modern 2-bedroom end-of-terrace house with a 6% increase on the previous rent and multiple applicants made offers after the first batch of viewings. In central Oxford, overseas applicants continue to look for high-quality, well-located properties and a 2-bedroom apartment (photo below) recently relisted at a 4.5% rent increase and let within days.
Family homes more price sensitive
It has been long observed that the family homes market in Oxfordshire quietens down once the school term starts and demand reduces over the winter months. Lets are still being agreed on larger houses, but finding the right tenant can take a little longer and these require careful rent setting. For example, a 5-bedroom house in Bicester at £2,6001 which was advertised for three weeks before it was let to a family relocating from overseas.
Conversely, our Witney and Woodstock offices have seen some of their larger properties let quickly, such as a 4-bedroom house in Eynsham which let within a week. They have also noticed a small uplift in enquiries from applicants moving out of London and a 3-bedroom house in Shipton under Wychwood (main photo) was listed at £4,000 and also let within a week to a couple moving out of the capital.
Must Have vs Nice to have
The only true ‘trend’ identified in terms of tenants’ requirements has been for quality. With low choice, things like space to work from home become a bonus rather than a deal-breaker. However, if they are going to be spending more money, renters expect a certain standard. Even location is no longer the be-all and end-all; in Oxford and Witney applicants have expanded their search area in order to find the right property.
Pets
Pet ownership spiked over the pandemic (see graph), and it feels as though every tenant comes with an animal companion. Larger properties and more rural homes are likely to attract renters with pets so landlords will have to consider them to open the pool of potential tenants and avoid risking an empty property.
The Renters’ Rights Bill aims to make it easier for tenants to keep pets, but landlords will be able to stipulate that tenants have insurance in place to cover potential damage, and landlords are able to reasonably refuse permission. We have always advised landlords on a case-by-case basis, and where they are amenable, we advertise the property with an increased ‘pet rent’ to help if there is any damage.
Buying and relocating
Although the Bank of England left interest rates unchanged at 5%, mortgage rates are on a downward trend, encouraging borrowers to move. In areas that have seen more new builds completing, a small number of tenants have made the move to become homeowners, bringing those rental properties back to the market. At the same time, we have seen an increase in the number of enquiries from homeowners who are moving abroad and planning to let their home out. For example, a beautiful 5-bedroom home near Abingdon at £3,950 (photo below) which let to a family moving to the area for schooling.
Selling and failed sales
Across the county some landlords have decided to sell their rental properties, however we have noticed that this is an equally price-sensitive market. Although location is, of course, important, the local market and quality of the property will influence what a buyer is willing to pay. In many cases, these properties have returned to the letting market and quickly let to great tenants, for example a 3-bedroom cottage in Woodstock at £1,700 (photo below) which then let to a couple moving to the area for work.
Landlords Meeting Expectations
Our last report noted an increase in tenant expectations due to rents increasing so significantly over the last few years. Even where stock is limited, tenants won’t pay for a sub-standard property and those in the best condition continue to achieve the strongest rents. This quarter has seen a number of landlords upgrading their properties, from flooring and redecoration through to new kitchens or bathrooms. For example, a 2-bedroom apartment in Abingdon which had a new bathroom and flooring installed, increasing the rent by 12%. A good agent will look at the long-term and will advise you of what will be required in the coming years so that it’s not suddenly urgent. What is vital is to not reach the point where an upgrade is not about increasing the rent but being able to let it at all.
Minimum EPC Ratings
A consultation is expected later this year after Labour announced plans for rented homes to reach a performance certificate rating of C or above by 2030. The Conservatives originally planned to reach this deadline by 2028, but this was dropped as part of Sunak’s relaxation of net zero goals. The consultation is expected to include a cap on the amount landlords will have to spend2 and the government will continue to develop incentives such as the Great British Insulation Scheme. If you would like to discuss your rental property’s energy efficiency, email [email protected].
Persistence in the face of a challenge
High rents mean high tenant expectations and to attract the best quality applicant who will look after your property, it needs to be presented well. With the forthcoming abolition of Section 21, the quality of applicant will become increasingly important, so ensuring you attract the best, who is then properly qualified and referenced by your agent, will be key. We are pleased to see additional grounds for landlords being proposed, particularly allowing Mandatory possession (Ground 4A) for those letting to students for the academic year.
The Renters’ Rights Bill will undoubtedly transform the PRS, but it is important not to simply rely on sensationalised headlines. The Bill still has a long way to go before it becomes law and we await the detail following the second reading in October and will continue to monitor its progress on behalf of our clients. It’s important to remember that its aim is to get rid of bad landlords. Good landlords using good agents should continue to be successful – especially in Oxfordshire.
1 All rents are marketing rents and per calendar month.
2 https://www.bbc.co.uk/news/articles/c1l4py0gz3jo
