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Property Prices: Housing shortage pushes costs up
AVERAGE house prices in Oxfordshire have hit their highest level since the economic downturn.
Figures from the Land Registry showed the average price for properties sold in May was £241,290, less than £4,000 below the same month in 2008.
Property experts said a shortage of homes for sale in sought-after areas of Oxford had pushed up prices, but that buyers faced a much harder task in getting mortgages since the crash.
Estate agent Graham McDonald, of Kemp & Kemp, said: What has kept Oxford prices up has really been a lack of supply. Despite the economy prices have gradually crept up.
“In places like Abingdon and Didcot, where more houses have been built, prices have not risen to the same level.”
Prices were also buoyed by a move by wealthier people towards urban living, he said.
And he added: “Even in the less expensive parts of Oxford people are keen to buy. Some of it is school catchment areas, and some of it is not wanting to commute, or not wanting to drive their children to school.”
Robin Swailes, director of North Oxford Property Services, in Jericho, believed the recovery of prices in Oxford started 14 months ago.
He said: “It’s down to continued demand, a lack of stock and buoyant local economy.”
Nigel Wild, president of Oxfordshire Chamber of Commerce, added: “The economy is pretty buoyant in Oxfordshire, and I think house prices reflect that.”
Ronnie Van der Ploeg, of Savills, said: “The frustration for buyers is poor stock levels.
“There are never enough for sale.
“Oxford draws people in because of the schools and business parks. People move in but there are not huge levels of stock, so prices rise.”
Mark Charter, of Carter Jonas, said: “Prices in prime locations have raced ahead of the bottom end of the market. The Oxford economy is good and unemployment is relatively low.”
The economic downturn started in December 2007 and by January 2009, the UK had officially entered recession.
This year it entered recession once more as the feared “double dip” became reality.
But what has also changed since 2007 is the availability of mortgages.
Amanda Thomas, director of Orange Frog Mortgages in Abingdon, said five years ago people could obtain 100 per cent mortgages worth up to seven times their income.
Now virtually no-one can obtain a home loan with less than a 10 per cent deposit and it was a struggle to obtain four times an annual wage.
She added: “If you want a 90 per cent mortgage now, the rates will be higher and you have to have a perfect credit history as well as a good income. Realistically, people looking to buy need a 15 per cent deposit as the rates will be much better.”
And obtaining a mortgage has also become more difficult as people’s incomes struggle to keep pace with inflation.
According to the Office for National Statistics, in 2007 the average annual wage for a senior professional in Oxfordshire was £28,155. By 2011 it was, £31,238, a rise of less than 2.2 per cent a year. Meanwhile, rents in Oxfordshire have risen 20 per cent in the past five years due to increasing demand.
Frank Webster, director of Summertown-based property rental specialists Finders Keepers, said: “Due to the lack of money, people can’t buy and are having to rent. As well as having to get a deposit together, there is a lot of uncertainty over interest rates.”
The latest Land Registry figures, based on completed sales, put the average Oxfordshire house price at £241,290 in May, up 0.8 per cent on the previous month. The last time prices were as high was August 2008, when the average was £241,334.
- A new study lists Oxford as the second least affordable local authority district in the country for first-time buyers.
The study from the Halifax bank found nationally the share of UK towns and cities that are affordable to first-time buyers was at its highest in a decade due to the sluggish housing market.
But it highlighted a widening North-South divide and said in Oxford homes cost 7.6 times average earnings – making it the second least affordable place behind Brent, in London.
Oxford was the only council district outside London to feature in the list of the 10 least affordable places to buy property.