Oxford, Cambridge House Prices To Suffer The Most

[Realistbear]

http://www.bloomberg.com/news/2010-10-18/oxford-cambridge-house-prices-to-suffer-the-most-from-state-spending-cuts.html

Oxford, Cambridge House Prices to Suffer the Most From State Spending Cuts

By Peter "Pete" Woodifield - Oct 18, 2010 1:20 PM

House prices in Oxford and Cambridge may suffer more from government spending cuts than anywhere else in England and Wales because of the university towns’ high proportion of public-sector workers.

About 46 percent of workers in Oxford are employed by the state, the most among all municipalities, according to a survey published today by property website Zoopla.co.uk. Average house prices have already fallen almost 4 percent in Oxford in the past three years.

The area least likely to be hurt by the cuts is the City of London, the capital’s main financial district, where 4 percent of workers are in the public sector.

In Cambridge, the proportion is 43 percent. Public-sector employees account for 40 percent or more of the workforce in nine municipalities in England and Wales.

Oxbridge and Brighton were among the worst bubble and BTL vortexes in the UK. Watch em slide!

Laugh? I thought I would never stop.

Edited October 18, 2010 by Realistbear

[Bear Goggles]

I'm in Oxford and there is also a large amount of institutional student accommodation about to hit the market next college year as many colleges and Brookes uni are building large new halls of residence. BTLers are going to feel the pain methinks.

[MongerOfDoom]

http://www.bloomberg...nding-cuts.html

House prices in Oxford and Cambridge may suffer more from government spending cuts than anywhere else in England and Wales because of the university towns' high proportion of public-sector workers.

What a load. Public sector obviously includes the universities, and the cuts there will be to a large extent replaced by an increase in fees. Is there any indication anywhere that the government wish to devastate Oxbridge and turn them into two more polys? Thought not. Whether or not there is a large cut once we know for certain, it's certainly silly to look in passing at a one-dimensional percentage and then claim with certainty what it implies for house-prices.

Laugh? I thought I would never stop.

As long as you know what you are laughing at ....

[koala_bear]

I'm in Oxford and there is also a large amount of institutional student accommodation about to hit the market next college year as many colleges and Brookes uni are building large new halls of residence. BTLers are going to feel the pain methinks.

Spot on (was up there for a good while too). Both Unis expanded their student numbers over the last 10-15 years by about 10k between them but the building of accomodation always lagged behind creating an army of btl property fillers. The colleges make a mint out of using the accommodation for conference facilities in the uni holidays which is a good part of the driving force for the building spree (quite often the alumni pick up the tab for the building costs).

[montesquieu]

Spot on (was up there for a good while too). Both Unis expanded their student numbers over the last 10-15 years by about 10k between them but the building of accomodation always lagged behind creating an army of btl property fillers. The colleges make a mint out of using the accommodation for conference facilities in the uni holidays which is a good part of the driving force for the building spree (quite often the alumni pick up the tab for the building costs).

Would have to be huge numbers of new residences to really make an impact, what have you got, 20,000 students at least, even a large residence has only 150-200 bedrooms so you'd need to be talking quite a few of these to really affect things for the BTL brigade (sadly).

I must admit I scratched my head that Oxford was some hotbed of public sector employment, till I realised that included university staff. Can't see any reduction in student numbers in fact fresh money coming in might bring expansion.

Some places are going to get hammered over the public sector cuts though, Newcastle, Edinburgh (assuming the Nats can't fend off the inevitable for much longer), Coventry, possibly quite a few of the big military towns as well.

[MrPin]

The mother of a friend, has a house right in the middle of Cambridge!

I've never before been woken up by such "gifted mathematicians" throwing up at 3 am!

[Kyoto]

This rather puts to bed the myth that it's just northern towns and cities dependant on the public sector. Oxford, Cambridge, London, Brighton all have the same issue.

[efdemin]

What a load. Public sector obviously includes the universities, and the cuts there will be to a large extent replaced by an increase in fees. Is there any indication anywhere that the government wish to devastate Oxbridge and turn them into two more polys? Thought not. Whether or not there is a large cut once we know for certain, it's certainly silly to look in passing at a one-dimensional percentage and then claim with certainty what it implies for house-prices.

As long as you know what you are laughing at ....

+1

Having to work in Cambridge I'd hope the prices would have fallen more recently but they haven't and I can't see what might trigger it here.

University - might make some cost savings but it's not going anywhere surely?

University of East Anglia - yes, that one, I guess this will be impacted if they try to raise fees so fewer students in the Mill Road / Romsey town area. But they would easily be replaced by 'young professionals' wanting to live near the station and/or nightlife.

Addenbrookes Hospital - well the NHS is pretty safe surely so no massive impact here.

Councils? Yes, but it's not that big, surely?

Any other big public sector employers in Cambridge? I reckon the % is skewed because Cambridge is pretty small when you take out the Universities and hospital.

[BuyInOxford]

Its not as bad as that article predicts.

Click this link for as good an indepth analysis on where will be affacted as you will find.

http://www.bbc.co.uk/news/business-11233799

This article doesnt include NI Wales or Scotland where the public sector employment is amongst the highest.

[Bug16]

From memory Cambridge prices dropped 20% in the 90's crash. I have no idea what the timescale was.

I reckon that the crash for Cambridge will happen where people have paid way over the odds to live in the manky areas or they've bought new build flats. Beyond that I can't see much happening as most public sector workers don't own property in the City, they either live on the outskirts or rent.

Edited October 19, 2010 by Bug16

[Tired of Waiting]

This rather puts to bed the myth that it's just northern towns and cities dependant on the public sector. Oxford, Cambridge, London, Brighton all have the same issue.

+ 1

Besides, from what many posters here say, prices in the north have already fallen, by much more than in the south. The bubble there has deflated, at least partially, even in terms of ratio to local average earnings.

Edit to add:

The best areas have resisted for longer, but will fall eventually, for 2 reasons:

1) Markets are always frothier at the top.

2) Gravity always wins.

Let's illustrate these two:

1)

2)

Edited October 19, 2010 by Tired of Waiting

[koala_bear]

+1

Having to work in Cambridge I'd hope the prices would have fallen more recently but they haven't and I can't see what might trigger it here.

University - might make some cost savings but it's not going anywhere surely?

University of East Anglia - yes, that one, I guess this will be impacted if they try to raise fees so fewer students in the Mill Road / Romsey town area. But they would easily be replaced by 'young professionals' wanting to live near the station and/or nightlife.

Addenbrookes Hospital - well the NHS is pretty safe surely so no massive impact here.

Councils? Yes, but it's not that big, surely?

Any other big public sector employers in Cambridge? I reckon the % is skewed because Cambridge is pretty small when you take out the Universities and hospital.

ditto for Oxford, 2 universities (lots of students who aren't employees and in accommodation terms displace possible private sector employees ~25k students of ~125k adult population), a large teaching hospital (4+ sites), a city council, county council but probably has more private sector employment that Cambridge as there is the BMW factory as a big employer. The NHS is going to have cuts because NHS inflation is 8-10% (drugs costs etc) and they are only going to get the government's favourite non measure of inflation for their real terms only increase, so 6-7% cuts in the NHS coming up. Universities are going to get hit hard as the funding is being cut from the next budget but their ability to raise fees will only come in several years time. The oxford college bursars compile their own inflation index and it used to typically be at RPI + 1 to 2%.

[Johnny Storm]

You seem rather bitter Realist.

[Guest_FaFa!_*]

University of East Anglia - yes, that one

<pedant>

You mean the one in Norwich?

Bit of a commute isn't it?

You mean Anglia Ruskin, I presume, which is in Cambridge

</pedant>

[corevalue]

Cambridge prices are supported by rich foreign students who are bought flats by their parents; the fast train to Liverpool Street, very handy for the city; finally there are lots of high-tech jobs around the area ("silicon fen").

I don't know Oxford as well, but it benefits from at least two of those three.

[payback period]

Cambridge prices are supported by rich foreign students who are bought flats by their parents; the fast train to Liverpool Street, very handy for the city; finally there are lots of high-tech jobs around the area ("silicon fen").

Handy it is not. It's a four hour daily commute on a railway which frequently has problems e.g. rolling stock failures, flooding, snow.

It's an unsustainable lifestyle for more than a few years and totally incompatible with anything other than a 9-5 job in the city. Been there, got the scars.

Yes rich foreign students get bought flats in Cambridge while they they study but then they go off to live in Central London.

[efdemin]

<pedant>

You mean the one in Norwich?

Bit of a commute isn't it?

You mean Anglia Ruskin, I presume, which is in Cambridge

</pedant>

Ah, yes.

I think the name changed in the last few years though? That's my excuse anyway....

[workingnomad]

Cambridge will never drop that much because it is....

very wealthy

has good employment

shortage of housing

international appeal...

I could go on

Edited October 19, 2010 by workingnomad

[Tired of Waiting]

Cambridge will never drop that much because it is....

very wealthy

has good employment

shortage of housing

international appeal...

I could go on

"London Prime" too. Biggest falls last month there.

As I said above:

The best areas have resisted for longer, but will fall eventually, for 2 reasons:

1) Markets are always frothier at the top.

2) Gravity always wins.

Let's illustrate these two:

1)

2)

[/b]

[Quicken]

In relation to this, the front page headline in last week's Oxford Times was:

"University has a £1bn vision to transform area of city"

detailing the plans to redevelop the Oxford University science area, including the largest Chemistry department in Europe (£165m, 600 construction jobs), a new Physics department etc. etc.

This is on top of the existing £600m redevelopment of the Radcliffe Infirmary site.

http://www.oxfordtimes.co.uk/news/yourtown/oxford/8450125.__1bn_vision_to_transform_area_of_city/

Almost 50,000 people in Oxford work in the public sector, representing almost half of the total workforce, the highest proportion in the UK.

The education sector in the city is particularly important, accounting for almost 20 per cent of jobs in the city.

But it appears that Oxford University will buck the trend of cutting back on investment in the public sector by setting out its masterplan to redevelop what is termed the South Parks-Keble Science Triangle, near the University Parks.

Oxford Brookes is also trying to push forward with a £132m Campus development, but faces a legal challenge to the plans:

http://www.oxfordtimes.co.uk/news/8456244.Brookes_campus_battle_may_move_to_High_Court/

These big construction projects are likely to run for years. On the other hand, they might not get started for years...

Q

[easy2012]

I'm in Oxford and there is also a large amount of institutional student accommodation about to hit the market next college year as many colleges and Brookes uni are building large new halls of residence. BTLers are going to feel the pain methinks.

Interesting that it takes so long for the unis to figure out that they can make good money out of student accommodation.

The Oxford given in the article is really the area administered by Oxford City Council, which is public sector dependent (the main business

there is really Oxford Uni....) Oxford Suburds (Cherwell, Vale of whitehouse etc) are not that private sector dependent.

[MinceBalls]

The area least likely to be hurt by the cuts is the City of London, the capital’s main financial district, where 4 percent of workers are in the public sector.

This is a turd article: people who work IN the City do not Live IN the City.... some useless journo is just picking numbers and making 2+2=5

[Timak]

I do think prices will fall in Cambridge, as they will everywhere, but I don't actually think the bubble here was anywhere near as bad as places like Leeds etc apart from a few new build apartments near the train station that were massively overpriced.

We do have high public sector employment but that is pretty much entirely based on a massive university and teaching hospital dominating the city. They are currently expanding the hospital site to turn it into a cluster centre for bio-research including a brand new MRC building and most of the charities are moving their research centres to the site too. There is a new link road to the M11 which currently goes through fields but is soon to be lined with houses on both sides.

In terms of private sector work we have ARM, Autonomy, NAPP, MedImmune, Redgate, Worldpay, Microsoft, Sony and half the UK games industry so sadly I don't think we'll see the same collapse as elsewhere.

[corevalue]

Handy it is not. It's a four hour daily commute on a railway which frequently has problems e.g. rolling stock failures, flooding, snow.

It's an unsustainable lifestyle for more than a few years and totally incompatible with anything other than a 9-5 job in the city. Been there, got the scars.

Yes rich foreign students get bought flats in Cambridge while they they study but then they go off to live in Central London.

Absolutely agree with you, but still people do it as they see living in Cambridge preferable to living in the suburbs of London. The flats near Cambridge station, about £220K for a one-bed, and they're still building? Madness.

In 2007, The 07:18 to Liverpool Street was no. 2 in Transport 2000's worst train commute in the UK list, 85% over-capacity.

BBC News

[Kurt Barlow]

Cambridge prices are supported by rich foreign students who are bought flats by their parents; the fast train to Liverpool Street, very handy for the city; finally there are lots of high-tech jobs around the area ("silicon fen").

I don't know Oxford as well, but it benefits from at least two of those three.

Yep - a friend of mine teaches english to rich saudis and russians. The money they have is obscene. Often when they leave accomodation they leave behind £3-4 K of electrical equipment.