Rising housing prices in Oxford: Are student houses no longer an affordable option?
Being the third most expensive city for students to live in the UK and suffering from the effects of inflation, private rental properties are becoming less and less affordable in Oxford.
Inflation has impacted the UK significantly, particularly over the past three years; increasing food costs, bills, energy, and fuel. But how is it affecting students, and, in particular, student housing in Oxford? According to the Office for National Statistics (ONS), private rental properties in Oxford have risen from an average of £1,626 per month in October 2023 to £1,751 per month as of October 2024, demonstrating a 7.7% rise overall and leaving students moving slowly away from private rental properties as a form of university accommodation. But what has catalysed this inflation, and how does this impact students living in Oxford?
What initially caused rising rental costs?
The cost-of-living crisis has resulted in the rise in rental costs not only in Oxford but across the entirety of the UK. Students have experienced the cost-of-living crisis, whether that be rising rental costs, more expensive food shops, and/or rising bills but became a significant issue during the aftermath of COVID-19 and the Russian invasion of Ukraine. These two hugely impactful events caused inflation in the UK to begin rising, from 2020, peaking in 2022 and slowly beginning to fall since. In 2021, while experiencing the aftermath of the still present pandemic, that is when inflation and, therefore, cost-of-living began their rapid growth, peaking in 2022 with Russia’s invasion of Ukraine and, as a result, significantly higher fuel and energy costs.
According to the House of Commons Research Briefing, the increase in inflation between 2021 and 2022 (the aftermath of this significant inflation we are still experiencing now) is due to three international factors:
1) The high global demand for consumer goods – due to COVID-19 and lockdowns
2) Supply chain distribution in relation to the demand for consumer goods
3) Significantly higher fuel and energy costs largely due to Russia’s invasion of Ukraine in 2022
According to the House of Commons, these factors are the leading reasons for the rise in inflation and, consequently, the cost of living in the UK. They form a domino effect on every aspect of day-to-day life, including rental costs. The graph below demonstrates the changes in the inflation rate over the past four years, peaking in 2022 due to Russia’s full-scale invasion of Ukraine in the aftermath of COVID-19 and slowly reducing while the country recovers and adapts to the effects these events had on the economy as, as a result, cost-of-living.
Why did rental costs have to increase?
Rental costs had to increase to keep up with the increasing costs of other aspects of life, whether that be rising fuel costs, food prices, energy, and water bills; costs for landlords themselves rose as well as a higher demand of people wanting to rent rather than buy, consequently causing private rental houses to increase in price too. The graph below visualises data from the ONS, comparing annual private rental prices in Oxford, England and Great Britain. While Oxford currently lies below the average in England and Great Britain, the steep increase of almost 2% in inflation between October 2023 and October 2024 is much more significant than the more plateaued annual average for England and Great Britain.
As well as inflation being a leading factor in the increasing rental costs, the housing shortage crisis in the UK is also a factor, with less affordable housing being built resulting in more people looking to rent and, due to this high demand, an increase in rental prices in the market. According to the National Housing Federation, 340,000 houses should be built every year, with 140,000 being affordable – a target failed by the Conservative government but hopefully more of a focus with our new Labour government, leading to the potential reduction in rental prices in the UK.
What does this mean for students in Oxford?
With rent prices increasing, the financial strain students are experiencing in terms of their maintenance government loan not being enough to cover the costs is causing student housing to be less of an affordable option in Oxford. For students to be able to afford the rental costs, cuts to important aspects of student life such as social life, food, and increased reliance on parental support; due to this many students do not see private rental properties as an option, the sacrifices not worth being it in comparison to living in student/university-owned accommodation – a more affordable option. Regardless of the current cost of living crisis and inflation, Oxford has always been on the pricier side in terms of living for students, being the third most expensive student area in the UK, the pressure of cost of living already exists in the student city regardless of inflation.
Oxford Brookes University student and current private rental property tenant, Emma Hoverd, commented, “The rent for my HMO [house of multiple occupancy] in 2023 was £3,250 per month and rose to £3,500 per month in 2024. The landlord has told us he will be raising rent again next year to £3,950 and I just can’t afford it. I'm already having to work more hours than I should be to afford the rent now; I’m even considering getting a second job.”
This 7.7% average rise in private rentals in Oxford is not only impacting residents in Oxford but also largely impacting students – who make up 22% of the city’s population – causing the option of renting a student house to be less of an affordable one; with non-first year students choosing to stick with student accommodation rather than a private rental property. Emma Hoverd went on to say:
“Instead of a private rental house for my fourth year [of university] I have decided to go back into student halls as there’s nothing within a walkable distance to both university and shops within my budget anymore, I don’t really have much of a choice unfortunately”.
With annual private rental inflation in Oxford still gradually on the rise, after the large jump of almost 2% between 2023 and 2024 hence the significant rise in rental prices over the past year, students like Emma are going to struggle to afford private housing unless more support is provided or inflation has a sudden increase which is unlikely within the next year. But what can potentially be done to not only support students but also to allow landlords to have tenants and not be forced to sell their HMO properties?
What changes could be made to help students?
With several important aspects of university life rising due to inflation—food, rent, bills, transport—the question arises over whether government maintenance loans should increase to compensate and support students more. With Oxford being the third most expensive place for students to live in the UK and prices not being significantly different from London's cost of living, the call for action for more assistance from the government student finance is needed by students. With the average price of private rental property in London being between £2,121 and £2,151, the difference is not vast when compared to the Oxford average which is currently around £1,751 according to the ONS.
Oxford Brookes University student, Emma Hoverd’s opinion on what changes could be made to assist students was, “I do think a higher maintenance loan should be given to students living in Oxford, not just because of inflation but also because it is one of the most expensive cities to live in the UK. I don’t think the cost of living is that far from London costs, and London university students get more loan. I get the higher end of the allowance from student finance and each payment doesn’t even cover three months of my rent, it's just not enough.”
While this is not a permanent change for all Oxford students, Oxford Brookes University provides financial aid to students struggling with the affordability of their housing/accommodation as a result of the cost-of-living crisis. If you are a Brookes student struggling to afford to live in Oxford and it's affecting your participation in university, make sure to contact the financial aid team to help and support you.