Areas of Cambridge: Property Investment Buy-to-Let Hotspots
Cambridge is well known as a university city, but there’s much more to Cambridge than that. Mainly thanks to the university Cambridge is a hotspot for research, science and technology that is renowned around the world. It is the home of world-changing discoveries, being the place where the structure of DNA was first identified... as well as the place where association football was invented.
Little wonder then that Cambridge has a buoyant property market with huge demand both for property to buy and property to rent, making it a truly exciting city for property investors.
Why Invest in Cambridge?
Cambridge is a vibrant city, renowned for its bustling market, beautiful greenery, and famous university. Here are some of the main reasons investors are flocking to the area.
The Cambridge Science Parks
Cambridge's science parks bring huge global companies to the city. They have transformed Cambridge into a leading global technology hub, specialising in futuristic industries like software, research and development, pharmaceuticals, and biotechnology.
The parks provide specialist facilities and services for a range of R&D sectors, fostering close links with the scientific excellence of the University of Cambridge. Home to over 170 companies and 5,000 personnel, the Cambridge Science Park continues to attract new businesses, from small start-ups to subsidiaries of multinational corporations.
A Booming Economy
Cambridge was the fastest-growing economy in the UK between 2011 and 2021 and is a member of the Fast Growth Cities group along with Milton Keynes, Norwich, Oxford, Peterborough and Swindon. Its strong economy is largely down to the success of its science parks. The city has seen a nearly threefold increase in scientific and technical employment over the last decade.
According to a report by Grant Thornton, the turnover of Cambridgeshire's largest companies leapt 10% last year to £10.7bn.
A Hub for Innovation
Cambridge is a hotspot for research, science, and technology, with world-changing discoveries being made in the city. Cambridge University is renowned for launching innovative spin-off companies, and its students and graduates are known to form exciting start-ups.
The city's reputation as a hub for innovation has drawn record funding for these 'spinouts', bringing increased investment into the local economy.
Strong Transport Links
Cambridge is well connected, with good road and rail links to London and beyond. It is located near the A14 and M11, and just 50 minutes away from London by train. Within the next decade, a new railway line will connect Cambridge to Oxford and Milton Keynes and there are plans to build a new motorway connecting Cambridge and Oxford.
The city's airport also offers international connections.
A Popular Tourist Destination
Cambridge is a vibrant city with a colourful history that attracts visitors from around the world. Its rich historical and architectural heritage, alongside a bustling cultural scene, makes it an appealing tourist destination.
The city has an array of popular attractions, including renowned universities and colleges, beautiful parks and gardens, a thriving food scene, interesting museums and art galleries, and iconic landmarks.
Cambridge's universities and colleges are a significant draw, with visitors flocking to explore the famous institutions. Most colleges allow visitors, and some offer guided tours. The University's Fitzwilliam Museum is a popular destination, housing over half a million artworks and artefacts spanning centuries and civilisations. Another famous landmark is the King's College Chapel, which boasts impressive architecture and famous choral services.
A Vibrant Retail Scene
Cambridge has been named the UK's top city for retail in a survey of 1,000 retail centres by property consultancy Harper Dennis Hobbs. The city offers a thriving and diverse retail scene, including the popular Market Square.
Cambridge's high disposable income and increasing population make it an attractive location for retailers.
A Buoyant Property Market
The Cambridge property market is buoyant, with high demand and limited supply driving up prices. Limited availability and increasing rents make it an attractive location for buy-to-let investors.
Cambridge has some of the highest house prices in the UK, but properties in surrounding areas provide more affordable investment opportunities.
World-Class Healthcare
Addenbrookes Hospital is a large teaching hospital and major trauma centre, located on the Cambridge Biomedical Campus. It is a world leader in medical research and has strong affiliations with the University of Cambridge.
Amenities
Cambridge offers a good selection of amenities, including shops, restaurants, bars, and entertainment venues. The city's compact nature means many of these are within walking distance of each other.
Cambridge is famous for its pubs, and The Eagle is a renowned favourite, known for its traditional charm and real ale. Some pubs and bars offer spectacular views of the city and the River Cam.
For shoppers, the city centre has plenty of high-street brands and modern shopping centres, such as the Grand Arcade and Lion Yard. The traditional market square is a great place to explore, hosting countless retailers, and a food market. Cambridge also has a selection of independent boutiques and vintage stores, which can be found on Magdalene Street and Mill Road, among other areas.
Those who enjoy the outdoors can visit the university's Botanic Garden, or head to one of the city's parks, including Midsummer Common and Beechwoods.
Students are well-catered for in Cambridge, with a range of halls of residence and private accommodations available. The university's 31 colleges also provide student accommodation, and some offer shared rooms, ensuites, and flats.
Some popular student accommodations include Anglia House Cambridge, The Railyard - Cambridge, and Student Castle Cambridge. Rent varies depending on the type of accommodation, with shared houses typically the most affordable option. Student halls are generally more expensive but often include bills in the rent.
For tourists, there are many hotels, bed and breakfasts, and apartments available, ranging from budget-friendly to luxurious options. Some popular places to stay include the historic University Arms Cambridge and the 4* Gonville Hotel.
Property Values
Cambridge has a very competitive housing market, with high demand and relatively low supply. Properties sell quickly and often receive multiple offers. The average property in Cambridge receives around three offers and sells within 19-39 days.
House prices in the city are among the highest in the UK, with the median price estimated at £392,000-£466,000. However, prices can vary depending on location, with some properties fetching prices over £1 million. The most expensive properties tend to be located in postcodes such as CB2 7 and CB3.
Cambridge also has a range of more affordable homes, with some flats starting at around £140,000. Properties in the CB5 postcode for example tend to be more reasonably priced.
Average Asking Price by Postcode Area
Last updated: July 2024
Data from HM Land Registry
| Postcode District | Average Property Price |
|---|---|
| CB1 | £503,740 |
| CB2 | £535,588 |
| CB3 | £712,574 |
| CB4 | £447,613 |
| CB5 | £480,949 |
| CB6 | £376,193 |
Rental Demand
Cambridge has a thriving rental market, driven by high demand. The city's appeal to students, postgraduates, and professionals moving for work, contributes to a healthy rental environment.
Rental properties in Cambridge are in high demand, with some sources indicating a rise in average rent year on year. Bidwells reported a 3% increase in rental values over the last 12 months. According to Rightmove, Cambridge saw a 12% increase in asking rent compared to the previous year.
The cost of rent varies depending on location, property type, and quality. Tenants can expect to pay between £999 and $20,000 per month. Average rents range from £1,250 to $1,498 per month.
Properties in the city centre, especially those within walking distance of universities and colleges, are highly sought-after. Studio apartments and 1-2 bedroom flats are the most popular among tenants.
Cambridge's rental market is also influenced by short-term rentals, with many tenants seeking temporary accommodation. Additionally, the expansion of the city's Biomedical Campus, and other large companies and institutions, has drawn employees from across the UK and internationally.
Landlords benefit from the high demand, with some properties being let quickly, and off-market.
Average Rental Yield by Postcode Area
Rental yield is the rental return an investor can expect on their investment once costs have been taken into consideration.
Last updated: July 2024
| Postcode District | Average Rental Yield |
|---|---|
| CB1 | 4.4% |
| CB2 | 4.7% |
| CB3 | 3.9% |
| CB4 | 4.2% |
| CB5 | 4.2% |
| CB6 | 4.3% |
The Best Areas to Live in Cambridge
- Round Church Street: The closest area to the city centre, with a plethora of restaurants on your doorstep. The trade-off is that you can't park your car outside your house, so grocery shopping can be a little tricky.
- Gwydir Street: Known for its community spirit, with an annual summer street party that brings everyone together.
- De Freville Avenue: This area has a great reputation, with beautiful and spacious houses, a peaceful atmosphere, and proximity to the river. Residents are likely to be doctors or lecturers.
- The Marque: The tallest residential building in Cambridge. Best views of the city.
- Queen's Road: Convenient for undergraduates, as it is extremely close to the university.
- Riverside: A picturesque and tranquil area, perfect for river lovers and those who enjoy watching the rowers and ducks from their windows.
- Barrow Road: One of the most exclusive and expensive addresses in Cambridge, with an average house price of £1.5 million.
- Station Road: A commuter's dream, with easy access to the train station and regular trains to London.
- Clarendon Street: Located near a nice local state school, Parkside Community College, making it a good catchment area.
- Mill Road: Known for its wide variety of food options and bustling atmosphere, with great transport links and a range of bars, shops, and restaurants.
- Elfleda Road: A great location for football fans, as it is within walking distance of the Abbey Stadium.
- Chesterton: Named one of the best places to live in the UK by The Times in 2018, Chesterton offers excellent transport links, a lively bar and restaurant scene, and a peaceful location just a short walk from the city centre.
Property Investment in Cambridge
Here are a few tips on some of the different areas of Cambridge for property investors.
Cambridge City and Suburbs
Population: 97,500
Average House Price: £439,775
Cambridge city centre offers great amenities, easy access to the main college buildings plus lots of green spaces such as Parker’s Piece, Jesus Green and Midsummer Common too. There’s a huge demand for houses and flats here, for student accommodation and professional lets, but very limited supply and prices are high. The Mill Road, Petersfield and Romsey area has a reputation as a hip, trendy area for city living.
Cambridge’s south and east side suburbs have some of its priciest housing: Grantchester is popular with affluent families and academics, as is Newnham. Cherry Hinton is a sought-after area for young families thanks to, especially, popular schools. Further out, the one-time village of Trumpington is now a Cambridge suburb with lots of newly built houses and slightly cheaper property.
Northern suburbs such as Chesterton, Arbury, King’s Hedges and Fen Ditton tend to be cheaper and offer good value investment property, at least by Cambridge standards. A new train station at Cambridge North has also made the area more attractive to commuters.
Cambridge city centre property investors can earn yields of around 3-4% based on the CB1, CB2, CB3, CB4 and CB5 postcodes.
North of Cambridge
Population: 18,000
Average House Price: £370,000-£445,000
The area north of Cambridge offers several large villages, including Girton, Histon, Milton and Waterbeach, which have a rural feel yet good local amenities and city access. These villages are handy for the A14, The Busway guided bus service into Cambridge and the train station at Waterbeach. They’re mid-priced property areas by Cambridge standards.
Property investors also need to know that there are plans to develop a new town at Northstowe, the former site of RAF Oakington, just off the A14. As well as 10,000 new homes there will be new shops, schools and public amenities. A new town of 6,500 homes is also planned for near Waterbeach.
Expect yields of around 4% based on CB24.
South of Cambridge
Population: 13,800
Average House Price: £440,000-£558,000
The small towns and villages to the south – including Great Shelford, Little Shelford, Sawston and Melbourn are some of Cambridge’s most popular out of town residential locations. They’re popular with commuters as they have several local stations such as Meldreth, Shepreth and Great Shelford for trains into Cambridge and also London, plus good access to the M11 and A11.
Expect yields of around 4% based on CB22.
Other Areas To Consider
High Cambridge property prices mean investors could also consider areas nearby, which offer cheaper property investments as well as attractive yields.
Cambourne
Population: 9,100
Average House Price: £245,000
West of Cambridge you’ll find mostly small villages. Cambourne has expanded fast in recent years and has its own local amenities including shops and schools and a bus into Cambridge every 20 minutes. There are lots of new build houses and cheap investment property here, at least by Cambridge standards.
Yields here, in CB23, are around 4%.
Ely
Population: 18,000
Average House Price: £300,441
The small, cathedral city of Ely is 16 miles north of Cambridge but commuters can reach Cambridge city centre in 15 minutes by train. Property in Ely is on average 30% cheaper than in Cambridge.
Yields here, in CB6 and CB7, are around 4%.
Huntingdon and St. Ives
Population: 28,700
Average House Price: £300,909
The separate small towns of Huntingdon and St. Ives are around 18 miles north of Cambridge. They have good public transport into Cambridge including The Busway guided bus service. Huntingdon has a train station with a direct train to London. Property in Huntingdon and St. Ives is on average 30% cheaper than Cambridge.
Yields here, in PE26, PE27, PE28 and PE29 are around 4-5%.