Associate Partner - Head of Cambridge NEA
With the appointment of Michael Houlden as the new head of our Cambridge office, we take a look at the region’s housing market and what to expect in 2017
There are a number of reasons people choose Cambridge – but the biggest is always going to be the world-class education options. From primary to university level, the pedigree is second-to-none.
And while it isn’t the largest city, the historic city centre, green spaces and general lifestyle here are always going to have an attraction.
Plus, you can get to London in 45 minutes. And prices compared to the capital are far more affordable – you can get a family home with a garden here for the price of a two-bed flat in the centre of London.
Current house price trends
Over the past year, Cambridge house prices have been performing well. Land Registry figures show that both the city and the surrounding regions have reported positive price growth.
The city has seen average prices rise from £414,819 in October 2015 to £439,530 in October 2016 – a 6% uplift.
South Cambridgeshire rose 9.6% to £374,979. Compare this to the City of London, where prices dropped by 8.8%, and it’s clear that the local market here is booming.
Michael says business in the Cambridge office, which has been operating for almost four years, has been phenomenal. Despite potential uncertainty surrounding the political events of 2016, the Cambridge housing market is holding up particularly well.
He said: “The market in 2016 in Cambridge exceeded ours and most others expectations considering the outcomes of both the Brexit vote and the American presidential election.
“Although we’ve seen a slight levelling off in terms of prices recently, it was arguably due in any case after such a strong period of increases, beating even the fast paced London market.”
This is backed up by new figures from Rightmove that show Cambridge average asking prices rose by an impressive 75% between 2007 and 2017, to an average of £463,093. They put this down to its amazing city centre, many great schools and a growing international reputation as a tech hub.
Most desirable areas
One of the most popular areas in Cambridge is the south west of the city, where you have some of the most desirable homes just off Trumpington Road on streets such as Bentley Road and Barrow Road. This area is home to some of the best schools and the properties here come with large plots of land.
The areas of Newnham, known to the locals as ‘Newnham Village’, and nearby Grantchester are also popular as they offer greenery, public parks, walks along the river, large homes and easy access to the M11 for London.
Just to the south of the city is the village of Great Shelford. This is also great option as it’s on the mainline to London and has its own station close to the centre.
What can we expect in 2017?
While price growth is expected to remain positive, it could start to level off after such a long period of escalation.
Michael says that “realistic prices” will be the key to successful sales. But he expects demand for the region to remain strong thanks to a number of key developments and the ever-growing Cambridge Biomedical Campus.
A key development that could cause another price boom is the opening of the Cambridge North railway station. In 2016’s Autumn Statement, £110m funding was announced for the East/West rail link - dubbed the Varsity line - between Oxford and Cambridge.
It will also connect the cities to Milton Keynes, Bedford and Norwich, and help boost the growing commercial partnerships with institutions across the world that the universities are developing.
There would also be the added commercial benefit of tourists being able to travel faster between these centres and the capital.
But the market should remain as normal, Michael says. “The Cambridge market is pretty solid. Even when there are reports of spikes in the market, this is usually down to the sale of one or two large and expensive homes going a bit over the asking price that distorts the figures.
“The demand is always going to be there, because of the schools, ease of access and the lifestyle. There are only a limited number of the ‘classic Cambridge’ style homes – large homes with substantial gardens, near top schools – so demand for these will remain high.
“People buying because of the schools are planning on being in the area for 15-20 years. Over that period, even a £1.5m home will provide a good rate of return, so small changes in the market won’t really impact their decision to buy here.
“The investment market will also settle down this year, as the stamp duty changes of last year will have settled in.”