Our latest Spotlight on Cambridge Residential Development Sales examines why values in Cambridge continue to exceed the regional and national average. Download here.

City centre

Cambridge city centre offers a vibrant and attractive urban environment, making it a desirable place to live. Some 50% of buyers are investors, predominantly purchasing one and two bedroom apartments. 50% of these investors are international; some purchase homes for children studying at Cambridge University, others are attracted by good rental returns.

Indeed, properties here offer the potential for capital gains, given current price growth forecasts, as well as income returns underpinned by solid occupier demand from both students and professionals.

Many areas in the centre of Cambridge such as Castle and West Chesterton record over 30% of households living in the private rented sector. In common with prices, rents in Cambridge are higher than the regional and national averages. According to Rightmove data, the median monthly rent in Cambridge is £740 compared to an average of £538 across England & Wales.

New development in the city centre tends to be restricted to smaller schemes, due to restricted land available for development. Nonetheless, some larger redevelopment schemes have come to the market in recent years. These include Cambridge Riverside, a 195 unit scheme by Berkeley, and The Marque, a development by local developer Almaren.

City fringe

A number of multiple outlet urban extensions are in the pipeline on the city’s fringe. The majority of this development is the result of Greenfield strategic land releases.

The master plan for the Northstowe development, located north west of Cambridge is for 10,000 units, although so far an outline planning application has only been submitted for phase 1 (1,500 units). Clay Farm and Trumpington Meadows to the south of Cambridge are both already under construction consisting of 2,300 and 1,200 units respectively.

Approximately 80% of those who have bought properties at developments on the southern fringe of Cambridge are owner occupiers. Very few international buyers have been seen. Demand here is for large family housing.

For example, Skanska’s Seven Acres has been particularly successful. Seven Acres has recorded a price premium compared to Novo, a neighbour site for larger units, in terms of both unit price (36%) and £psft (13%). This premium has been driven by a range of factors including contemporary design suited to the target market, high specification, generous unit sizes and eco benefits.

In the most desirable suburban areas, such as Newnham, Queen Edith’s and Trumpington, properties are achieving an average £480 psft. For the best properties, values of up to £700 psft have been achieved, above the average in Islington and Hammersmith & Fulham according to data from Hometrack.

Sales of over £500,000 accounted for as much as 14.3% of all transactions in the market in the past year and the number of sales between Q2 2012 and Q1 2013 above £500,000 was marginally higher than in 2007.

Cambridge remains an attractive place to live with a buoyant local economy, within ready commuting distance of London. As a result, it continues to attract both owner occupiers and investors.

Taken from
Spotlight: Cambridge Residential Development Sales