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?
Most people will know that Cambridge is famous for its university and university colleges. As well at the University of Cambridge with 20,000 students, Anglia Ruskin University also has around 22,000 students many of whom study in Cambridge.
Overall, around one in five residents of Cambridge are students including undergraduates and a particularly large number of postgraduates undertaking study and research at Cambridge.
Investors considering investing in Cambridge need to know how important the Cambridge science parks are to the city and its economy. Cambridge’s science parks – partnerships between the university colleges and business – have been responsible for bringing huge global companies to the city. They have helped make it a world leader in futuristic industries like software, research and development, pharmaceuticals and biotechnology. All of these have brought highly-skilled, well-paid jobs and huge demand for property to buy and to let.
Addenbrooke’s Hospital is not only a major teaching hospital but a world leader in medical research. Royal Papworth Hospital, a world specialist cardiothoracic hospital, has recently moved to a brand new hospital on the Cambridge Biomedical Campus. Both are huge employers with several thousand medical staff, researchers and support staff working here.
It’s hardly a surprise then that the Cambridge economy is strong. This report says it has had the fastest growing economy in the UK over the last few years and is likely to remain so in future.
Academia aside, Cambridge came out as the top city in a survey of 1,000 retail centres by property consultancy Harper Dennis Hobbs… even beating London’s Knightsbridge and Chelsea! Cambridge also has a big tourist economy with 547,000 tourist visits a year.
Cambridge is already well connected, being close by the A14 and M11 and just 50 minutes from London by Thameslink train. But it will be even better connected in future, which is bound to help boost the property market: Within the next decade, Cambridge should have a new railway line, the East-West Rail project, connecting it to Oxford and Milton Keynes. A new motorway-standard road, the Oxford-Cambridge Expressway, will also connect Cambridge to the M1 and Oxford.
Cambridge property investors should also consider the Government’s proposals for the CaMKOx Arc. This is a plan to develop the ‘brain belt’ area between Cambridge, Milton Keynes and Oxford with several new towns, commercial developments and a million new homes with up to 1.9 million more people living in the area by 2050.
Property Values in Cambridge
High demand and limited supply mean Cambridge house prices are some of the highest in the UK. Hometrack says the current average Cambridge house price is £425,700 – only London is more expensive. Hometrack also says Cambridge property prices have risen 85% since the financial crisis, more than any other major city including London.
That doesn’t mean you can’t find cheap property investments in Cambridge though. Rightmove and Zoopla say Cambridge flats start at around £140,000.
Rental Demand in Cambridge
Cambridge has a buoyant property rental market, thanks to demand from students, postgraduates, those moving here to work permanently or on short work or study placements – to say nothing of demand from locals who can’t afford Cambridge property prices.
According to a report from VeriSmart Cambridge has the highest level of demand for rented homes out of the 100 towns and cities in the UK it studied.
Cambridge properties can earn landlords some of the highest rents in the UK. A survey by Ideal Flatmate says Cambridge student rents are amongst the highest in the UK outside London at £1,491 a month.
Cambridge property investors should know that Cambridge is notorious for traffic congestion. Buy to let properties that are within walking distance or cycling distance – lots of Cambridge commuters cycle – of the city centre, a train station, a university college or big employer should be very easy to let.
Property Investment in Cambridge
Here are a few tips on some of the different areas of Cambridge for property investors.
Cambridge City & Suburbs
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 new build 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
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
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.
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%.
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 Cambridge.
Yields here, in CB6 and CB7, are around 4%.
Huntingdon & St. Ives
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 on 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%.