Research by Savills suggests Oxford faces losing its competitive edge if it can’t resolve its housing, land and infrastructure problems.
The real estate adviser’s analysis of Higher Education Statistics Agency (HESA) data shows the city retains only 17 per cent of its graduates each year and the overwhelming majority of those that leave go to London where many earn higher than average incomes.
The research notes that some graduates from elsewhere move to the city but there is still a net loss of 55 per cent of people within two years of graduation. The figures put Oxford 15th in the country for retaining graduates – behind Cambridge, Birmingham, Manchester and Glasgow.
Lydia McLaren from Savills research team said: “While it is not unusual for small to medium university cities to lose graduates, Oxford has the potential to hold onto more of the talent that it creates at its universities, especially considering that the city’s graduate talent earns a premium of 37 per cent over the average for a recent UK graduate. Turning this around is going to be key to Oxford delivering on its future growth potential.”
Housing affordability was identified as a fundamental issue.
Lydia continued: “The results of our analysis are stark. The only postcode district that is affordable to graduates looking to rent is RG17 which is only partially within Oxfordshire and is reliant on a 45-minute travel time to key employment clusters by car.
“For those graduates looking to rely on public transport in order to access the key employment clusters, affordable housing options are even more severely restricted. Graduates who choose to stay in Oxfordshire are faced with a choice of spending a higher proportion of their income on rent or long commutes by car from as far as beyond the county.
‘On a global scale, data from Savills World Research identifies Oxford as the ninth least affordable city of 20 leading global cities for scientific research – with the average rent for a two-bedroom apartment equalling 49 per cent of the average gross income for the scientific research, putting it behind cities including Boston, Seattle and Shanghai.”
The average house prices in Oxford reached £577,000 in July – 29 per cent higher than the South East average. By 2021 the city’s average house price was more than 12 times average income.
Savills’ analysis of land use across Oxfordshire shows that, despite population growth, the city’s physical footprint has barely grown since 2000. Most development has been in urban extensions and expansions of other towns in the county.
Green Belt releases around the edge of Oxford, which feature in a number of Local Plans, are expected to relieve some of the pressure.
Commercial space is experiencing a dramatic lack of stock, despite demand for more than two million sq ft from the life sciences sector. Later stage venture capital-funded firms across all sectors could add a further 1.8 million sq ft of demand over the next four years.
Two million sq ft of commercial floorspace is due to be delivered between 2023 and 2026, mostly towards the end of that period. There is currently just 27,000 sq ft of lab space available.
Savills argues for a ‘big picture’ approach to planning for future land use.
Robert Linnell, head of planning for Savills Oxford, said: “Much can be achieved by cross-border cooperation. A fundamental challenge for planning successfully for the future of Oxford is that local authority boundaries don’t match the geography of the city’s economic reach especially as the physical capacity of Oxford comes under pressure.
The clear need for a strategic approach to county-wide planning underpinned the last round of Local Plans and delivered a stronger emphasis on growth and infrastructure than seen in previous years.
“We now have sufficient housing sites allocated to meet the identified housing need up to the end of the current plan periods, achieved through joint-working and agreement across the Oxfordshire authorities.
“This was positive progress but needs to go further. The demise of the Oxfordshire Plan 2050 demonstrates the scale of the challenge and, with it, big implications on the likelihood of future Government funding. However it is essential to provide long term stability and facilitate efficient and sustainable development across the county.
“Infrastructure is an important part of the equation. Infrastructure and public transport connections to and within the city centre and around Oxfordshire and to the wider Thames Valley are crucial to support future growth of the county.
“There have been recent positive steps with works to increase capacity at Oxford station, due to complete in 2024, the proposed re-opening of the Cowley Branch rail line and the Government’s recommitment to the East-West rail link between Oxford and Cambridge.
“However, given the pressure is already considerable, we will need to see much more progress as the city scales up, and significantly more funding. Again, success, in terms of economic, social and environmental gains, will come down to collaborative working across the county.”
Image: Chensiyuan, CC BY-SA 4.0 <https://creativecommons.org/licenses/by-sa/4.0>, via Wikimedia Commons
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