London is often touted as the most expensive place to live in the UK but recent studies from Oxford University have actually cited their own fair city as being even more expensive. With a property price to earnings ratio that is higher than London, average house prices in Oxford are 16.1 times the local average annual income compared to 15.7 times in London.
What’s driving this are a couple of things. Firstly, the house prices in Oxford are being driven up the number of London commuters who have moved out of the capital because of the exorbitant house prices. Many of these commuters have moved to places like Oxford which are in easy commutable distance and offer a high standard of living. Secondly, the greenbelt around Oxford is highly protected which means that housing in the city itself commands a high premium.
What’s happening in Oxford is underpinned by the fact that we have a significant housing supply crisis in the UK and in areas of high demand such as Oxford, the properties that are available become highly sought after and can therefore be priced accordingly.
Other high-priced towns and cities
There are other towns and cities as well as Oxford where the house price to earnings ratio are significantly high. Places such as Cambridge, Brighton, Reading and Milton Keynes all have average house prices which are more than 10 times the average local income. This means that for first time buyers it is a real struggle to get on the housing ladder and this is driving up the rates of rental.
It will be interesting to see over the coming months how the housing landscape of the UK changes, especially in the towns and cities surrounding London as more and more commuters escape the eye-watering prices of the capital to pastures new.