The two main universities are a key source of demand, with both the students and university employees forming a significant proportion of Oxford residents (see Graph 5).
While London remains the most popular market for overseas investors there is evidence these investors are looking to markets such as Oxford, where the university brand adds both kudos and reassures investors of ongoing demand in the future.
Total student numbers in Oxford, according to the latest data from HESA, have fallen slightly from a peak of 43,400 in 2006/07 to 42,800 in 2009/10. International students make up over 22% of the total student body, up from just over 18.5% in 2000/01.
In light of recent reductions in university funding, the need for high paying overseas students will intensify, with world-class universities such as Oxford being best placed to attract international demand.
State of the market
The Oxford employment market has been much more resilient over the course of the downturn, with total employment now higher than pre-downturn levels, having recovered significantly better than both the South East and England and Wales. Looking ahead, Oxford is forecast to see continued steady growth of 2% per annum over the next five years.
Average house prices in and around Oxford are highest within the affluent markets of north and west Oxford as well as in the desirable commuter villages surrounding Oxford and the nearby M40.
It is these markets where buyers are less reliant on high loan to value mortgages, which is where we expect to see the highest levels of house price growth in the short-to-medium-term. Since the market began to recover in late 2009, house price growth in Oxford has outperformed both the South East and England and Wales average. House prices in Oxford are now 1% above the previous peak, compared with -8% in the South East and -11% across England and Wales (see Forecast).
