Everything about Cambridge is booming — except housing supply

Some call it the Cambridge cluster; others, the Silicon Fen. In recent years, the university town’s technology and life sciences industry scene has been attracting record investment, talent — and homebuyers.

Last year, Richard and his wife Amanda relocated to Cambridge when she got a job with a biotech company in one of the city’s science parks. The couple sold the family home in Reading, Berkshire, and bought a five-bedroom detached house on Cambridge’s southern outskirts in November.

Despite the market slowdown — homes sales in the first nine months of the year were 25 per cent lower than in the same period in 2022, according to Land Registry data analysed by Hamptons estate agents — they still had to go to best and final offers to secure their home, for which they ended up paying £1.08mn.

Estate agents such as Richard Freshwater, director of Cheffins, say bidding wars are still happening in Cambridge for the most in-demand properties — often with well-paid tech or pharma workers swooping in and outbidding everyone else. Last year 27 per cent of buyers in the city paid more than asking price for their homes, according to Hamptons data. In London, the figure was 20 per cent.

“We knew Cambridge well because we lived in the city centre . . . 20 years ago,” says Richard, who works for a charity in London and did not want to disclose his last name. “However, it’s amazing how much it has changed.”

This place of historic colleges has witnessed an economic and population boom in recent years, with millions of square feet of new offices and laboratories, while the number of people living in the city grew by nearly 18 per cent between 2011 and 2021. Cambridge North railway station opened in 2017 to link to the Science Park, and Cambridge South station is set to open next year to support the Biomedical Campus. This is Europe’s largest medical research centre, home to AstraZeneca’s global headquarters and expected to accommodate 27,000 jobs by 2031.

But the city’s housing supply has failed to keep up. Property prices grew by 0.5 per cent in 2023 to an average of £510,960, just 2 per cent less than the London average — and more than 12 times local incomes. In the past five years, prices are up by 18 per cent; in the past 10 they’re up 59 per cent, according to Hamptons using Office for National Statistics data.

Meanwhile, the average rental price increased 8 per cent between the start of 2022 and November last year, while the number of rental homes advertised in the final quarter of 2023 was 23 per cent down on the 2017-19 average, according to a new report by estate agency Savills.

Cambridge has one of the worst housing crises in the UK. The university, economic activity and proximity to London all create huge demand

“Cambridge has one of the worst housing crises in the UK,” says Freddie Poser, executive director of the housing campaign group PricedOut. “The university, economic activity within the city and proximity to London all create huge demand and there are nowhere near enough homes.”

But ambitious promises from the government to expand the city — and create Britain’s answer to Silicon Valley by 2040 — have been met with incredulousness by locals.

Housing secretary Michael Gove’s plans for a new science quarter in Cambridge initially boasted 250,000 new homes, subsequently revised down to 150,000. But even that figure has been labelled “nonsensical” by Cambridgeshire council leaders because the city doesn’t have enough water to support them. In fact, the city is already struggling to deliver existing plans for 50,000 new houses by 2040 because of the lack of water — the Environment Agency has put 9,000 houses in the Cambridge region on hold because planners were unable to demonstrate there were sustainable water supplies.

Where the new homes are built is another point of contention. Currently, agents report that most of the demand is in the city itself. While Newnham, to the west, has traditionally been the most prestigious area, Ed Meyer, head of residential at Savills Cambridge, says many buyers now choose to live close to the main railway station, to the south-east of the city. As such, they home in on streets such as Tenison Road, Mawson Road and St Barnabas Road, near busy Mill Road, owing to their convenience and lower prices.

“Mill Road was once a bit gritty but it isn’t any more — it has very good delicatessens and coffee shops and the biggest houses in this area reach around £2mn,” Meyer says. Flats start at around £300,000.

South of the station, the area round Hills Road is popular for access to the Biomedical Campus and Addenbrooke’s Hospital, as well as being close to excellent schools including The Perse Upper, an independent, and state option Hills Road Sixth Form College. Some of the large semi-detached and detached houses with big gardens in this area go on sale for vast sums — a Victorian villa is on sale with Savills at £5.75mn.

Cambridge’s high-achieving schools are a huge draw for parents but traffic means school runs can become very long. Mark Davies, head of Strutt & Parker estate agency’s Cambridge office, is preparing to sell a house 10 miles outside the city for a family who want to move into the centre in order to reduce the journey time.

The villages of Great and Little Shelford, to the south of Cambridge, are also sought-after, says Anton Frost, partner at Carter Jonas estate agency. Great Shelford has a cycle path that goes to the centre of Cambridge via the Biomedical Campus and period cottages in this area cost about £550,000, while a semi-detached family house is typically £750,000 or more.

Prices in the north of Cambridge, in areas such as Girton, Histon and Impington, are typically slightly lower. North-west Cambridge is the site of Eddington, a new neighbourhood being developed by the University of Cambridge that includes 3,000 homes, half of which are affordable housing for university staff, as high house prices have become a challenge for attracting academic talent. “Academics are not paid the high salaries those in the private sector get,” Poser says.

While other new homes are planned for the north and east of Cambridge, much of the housebuilding in Cambridgeshire over the next 20 years is happening far outside the city, in places such as Northstowe, Waterbeach and Alconbury Weald.

Residents are worried about government plans for mega building in and around Cambridge because there is barely enough water for the city as it is

“Apart from Northstowe, most of the development so far has been small and higgledy-piggledy, and all is distant from the city so residents have to rely on cars,” says Paul Cheshire, emeritus professor of economic geography at the London School of Economics. “This has already put pressure on the transport system in and around the city and more far-off homes will only make this worse.”

Then there is the issue of water supply. “Residents are deeply worried about the government plans for mega building in and around Cambridge because there is barely enough water for the city as it is and no one has any trust that the government will provide the necessary infrastructure to support such massive development,” says Wendy Blythe, chair of the Federation of Cambridge Residents’ Associations.

Yet, despite the challenges, the city still has an irresistible lure for many. Last year, Libby Patel and her locum GP husband Jiten moved with their two young sons into their five-bedroom detached house at the Marleigh development, a new neighbourhood of 1,300 homes three miles north-east of Cambridge city centre, where homes cost from £339,950 for a one-bedroom flat to £979,950 for a five-bedroom house.

“We can cycle everywhere and Cambridge is such a vibrant city,” says Libby, who works for the University of Cambridge. “There’s so much culture and, for all the construction going on, it’s still home to some of the most beautiful historic buildings in the world.”

On the market

Semi-detached house, Histon, £750,000

A three-bedroom house in Histon, about a mile from the city centre and 2.5 miles from Cambridge Science Park. It has a mature garden with a studio/summer house and is for sale with Carter Jonas.

House, Fen Ditton, £1.25mn

A five-bedroom detached house extending over 3,325 sq ft and set in 0.5 acres in the village of Fen Ditton, on the north-east edge of Cambridge. For sale with Cheffins.

Detached house, central Cambridge, £5.75mn

A seven-bedroom Victorian villa with a games room and a large garden with a rubberised basketball court. It’s within walking distance of Hills Road, the main railway station and the Cambridge University Botanic Garden. Available through Savills.

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