Oxfordshire remains a fantastic county for buy-to-let landlords in which to invest and to enjoy above national average returns.
In the lettings market, demand continues to outstrip supply and now that we have an element of certainty over the ‘Brexit’ process, I expect to see a positive rental market with fresh stock levels already rising in Q1.
Collectively this means opportunity for mid-to-long-term capital growth and dependable annual yields. But knowing the area and your audience remains key to a successful ‘buy to let’ investment.
So, what does the lettings market look like in Oxford and the wider county for 2020?
East Oxford and in particular the Cowley Road area remains a firm favourite amongst investors and interestingly continues to provide the strongest yield in the county, with a good investment still achieving 5%.
Shrewd investors can still unearth cheap property by Oxford’s standards in this increasingly fashionable spot, where average house prices are £391,263.
The OX4 area, including Cowley, Littlemore, Florence Park, Rose Hill and Iffley are geographic areas where smart investors can still unlock good value and achieve yields of 5%.
In the central and northern side of the city, Jericho and Walton Manor remain appealing to young professionals and students. However, yields in OX2, where the average house price is £523,000 are lower, given higher capital values at around 3%.
The lettings market is slightly tougher in the city centre itself, given the paucity of private rented sector stock for buy-to-let investors seeking entry into OX1.
Overall Oxford city centre is again very popular with students and professionals and is great for rental investment when the availability presents itself, with a typical yield here of 4%. For investors looking to gain a foothold in the centre, it is worth noting it is hard to find suitable properties, given that most are owned by the colleges, or specialist student accommodation providers. Schemes come along once in a while, most recently as part of the Westgate development and developments such as The Lion Brewery and Stream Edge by Kingerlee Homes built over the past 15 years remain popular with tenants and therefore with investors alike when they come up ‘for sale’.
Headington remains a solid buy to let investment, where demand is always high. A large suburb with its own amenities and close to the city, it is popular for families, young professionals, Oxford Brookes University students and those who work at the numerous hospital campuses.
Average house prices are £451,900 and yields average 4%.
Botley is an area that could well be a very sensible investment for buy-to-let investors in 2020. With the redevelopment of the West Way Square due to complete this year Botley, property prices should experience growth over time, given the presence of this rather smart development of retail and restaurant outlets . Equally, thanks to its proximity to the city centre, Oxford station and A34, it remains a popular area for tenants in the mid-upper market.
Other sensible outlying areas for buy-to-let investors to look at are Kidlington and Abingdon, with average yields of 4%+. Thanks to Oxford Parkway Station, Kidlington’s stock will continue to rise and currently it is more affordable than the Oxford suburbs. While Abingdon remains popular due to its good schools and nearby transport connections to Oxford / London etc, this is a town that for the moment at least, looks undervalued.
2020 is likely therefore to provide investors with some opportunities both in Oxford and the wider county. Capital growth is also likely to make a refreshing, relatively consistent return over the coming 3-5 year term, which serves as an antidote to the past 3 years of uncertainty, given the political and economic upheaval of the recent past
By Gavin West, Managing Director of WEST-The Property Consultancy
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