Retaining talent is vital to Oxford remaining a global competitor

COMMENT Oxford’s global reputation for education and innovation has grown considerably during the past few years, accelerated by the recent successes of vaccines for Covid-19 and, potentially, malaria. It is now a location with significant development prospects, an enviable reputation and real estate opportunities on a par with Cambridge, London or indeed any international rival. However, despite these credentials, the city faces losing its competitive edge if it is unable to deliver on key ingredients to support its future growth. Lack of accommodation Savills analysis of the Higher Education Statistics Agency’s graduate data shows that the city retains just 17% of its graduates each year. Some of these losses are countered by Oxford’s ability to attract graduates from elsewhere, with the analysis showing that close to 4,000 graduates moved into the city during the same 15-month post-graduation window. However, a net loss of 55% within two years of graduation puts Oxford 15th in the country for retaining talent after graduation. 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 it creates – especially considering the city’s graduate talent earns a premium of 37% over the average for a recent UK graduate. What is driving them away? Our research highlights affordability constraints as a fundamental issue. Analysis of the rental market shows that recent graduates looking to rent a median one-bed flat are priced out of 94% of the market within Oxfordshire. In many respects, Oxford’s housing market is a victim of the city’s success, as its enviable reputation and economic prosperity has created exceptional demand for homes, which the city has been unable to deliver. This has led to robust house price growth, which has far outstripped that of income, with average house prices reaching more than 12 times local income by 2021. To some extent, many would-be first-time buyers priced out of the sales market are relying on private rented accommodation instead, prompting rapid increases in rents. Analysis of land use across Oxfordshire reveals the extent to which residential development has been constrained over a 20-year period. Despite considerable population growth, Oxford city’s physical footprint has hardly grown since 2000, with the majority of development since the turn of the millennium concentrated in urban extensions and expansions of major towns across the wider county. A fundamental challenge for planning successfully for the future of Oxford is that local authority boundaries do not match the geography of the city’s economic reach. The clear need for a strategic approach to county-wide planning underpinned the previous round of Local Plan reviews and delivered stronger growth than previous years. We now have sufficient sites allocated to meet the identified housing need up to the end of the current plan periods. This is positive progress but we need to go further. Scaling up 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. Various allocations now need to be delivered to keep pace with the high demand for employment space. There is good progress on a number of the strategic sites, but the planning process timescales for construction will mean that there will be a delay to delivery. Infrastructure is an important part of the equation. 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 will come down to collaboration. Now is a crucial point in Oxford’s future and, while it faces clear challenges, its potential to cement its reputation on the world stage is significant. A ‘big picture’ approach to achieving the growth it needs will be key. Tim Watson is Savills’ head of south central development team Photo © Savills