Heating up… and staying there!

Tuesday, 17 July 2018

It has been some time since I have felt I had the time for any “luxuries” such as writing like this for our site and for the “few people” who sometimes mail in there thanks – or not – for our thoughts on this subject. Anything other than core functions for our business, investors and end users has been put aside this last three months and a big factor in this is the birth of my first son Harrison. What a joy it is and what a reminder of how difficult it sometimes is too in the balancing act of work, play and most importantly family.

The investors in the fund – as i have done privately – I would like to re thank you – publicly as such – for your patience and also for your best wishes – beautiful, grateful.

So what is it that is currently doing the rounds in our favourite subject here in the UK and what do we think about its relevance and impact on our business…

Well the property market in general has slowed down significantly both in the eyes of the media and in our personal experience, house prices are – give or take minor fluctuations – broadly static in the majority of our chosen Postcode districts (Pd’s) and are in fact down between 3 and 5% in many other cities around the UK – more so in London. The decision to not buy in London at all and the parameters on our research model which helped in this decision have proved incredibly true the last 3 years or so.

More properties are coming to market (Up 8% or so) from this time last year which means that agents are well stocked but most importantly the capacity for negotiation is very good and this is proving to be a good time to buy at a discount

The fundamentals that are the foundations of our dysfunctional market here are consolidating further, there is still not even close to the amount of housing needed for the growing population both migrant and indigenous, the economy is doing well, very well in fact by anyones yardstick! The labour market is contracting for housing development and the prices are going up for this labour, meaning that less and less dwellings are being built

and the ones that are being built are often in locations that people are considerably less interested in living – even on a micro level! This is developing further the property price levels, in the right places.

The Private rental sector (PRS) is continuing its growth and as we suggested some time ago we are slowly but surely moving back to that pre 1950’s level of 50 – 60% private rental market. The proportion of renters that are in the 35 to 54 year old

bracket has nearly doubled in ten years and is still growing. But this trend is continuing to grow across all age demographics and there is no solution in sight to disrupt this pattern in the next five to ten years.


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Lastly is the political consultation taking place currently that is already in place in much of western Europe – that is longer term contracts for tenants, there is talk of this being made law although we doubt very much this will happen here anytime soon. The average time for anything housing to get through parliament and then the lords (which has many property owners) is years rather than months and there are very good arguments on both sides of this debate that will play themselves out during this period, we don’t expect any major disruption to the parameters currently in place for the PRS now or the near future and the safeguards we have installed in our model and structure allow for even some considerable changes to this market place.

Its business as usual and with continued care of our end users we maintain our 95% occupancy rates through our friends YORA and our above average returns!

May this glorious summer continue!

Adam Mackrell


Oxford Spires Group