Local market report and housing update
Winter 2022/23
Snapshot & Location
Cambridge, a city defined by its multifaceted history, culture and academia, offers a quintessentially British urban conurbation encircled by countryside. As a hub for innovation and intellect, it is one of the most famous places to work and study in the world. Its beautiful scenery and hidden gems have also made it an attractive tourist spot, attracting people from across the globe.
Location Map
Local demographics & economic trends
The population of Cambridge at the time of the 2021 census was 145,700. This is a substantial increase of 17.6%, or almost 22,000 additional people, since the 2011 census. This figure is a remarkable 28.3% higher than the population twenty years earlier in 2001, signifying sustained population growth in the city. If this rate of growth continues, the population could grow to over 170,000 in the next ten years.
The census shows that 52,400 households make up this population. This represents a modest increase of 4.0%, or 2,011 households, over the last ten years. With the population growing at a faster pace than households, the average household size has increased to 2.8 from 2.5.
Connectivity
Cambridge is well connected to the national road and rail networks, allowing it to flourish as both a business and tourist hotspot. It is situated about 55 miles north east of London and approximately 95 miles east of Birmingham. The M11 motorway runs from east London and terminates to the north-west of the city where it joins the A14, connecting the port of Felixstowe with the Midlands. Additionally, the city is in close proximity to the A1 (connecting at St Neots) which links London at the South with Edinburgh at its most northly point. It is also well connected to Oxford via Bedford and Milton Keynes to the west and to King’s Lynn to the north via Ely.
The local Housing Market
Sales Market
Average house prices by property type and location
Cambridge
South Cambridgeshire
England and Wales
Detached
Semi-detached
Terraced
Flat
Overall Average
£1,099,741
£646,522
£551,337
£330,666
£534,040
£652,495
£416,711
£344,005
£231,567
£460,383
£488,076
£298,211
£253,644
£253,542
£311,074
Source: HM Land Registry (October 2022, latest data)
"The average house price in Cambridge surpassed the £500,000 mark early in 2022 to now sit at just over £534,000"
Chart
Chart
Rental Market
With average rents in Cambridge of around £1,255 per calendar month (pcm) (ONS, Q1 2022), this reflects a rental premium of around 12% above nearby South Cambridgeshire’s figure of £1,117 pcm and 22% over the wider Cambridgeshire region’s figure of £1,028 pcm. The timelier data from REalyse (end 2022) suggests that rents have risen over the course of the year, placing them closer to the £1,440 pcm mark.
Cambridge
The skyline is dominated by university buildings with a unique blend of old and new architectural styles. With the oldest buildings, St Bene't's Church, dating back to the 11th century, the city has a visibly rich history. It is also a vibrant, modern city with an array of shopping and leisure facilities. Cambridge has three shopping centres, The Grafton, Lion Yard and Grand Arcade which are home to a mix of luxury, high-street and independent retailers.
There is also a multitude of theatres, cinemas, museums and music venues on offer. The Fitzwilliam Museum, in particular, is renowned for its diverse art and antiquities collection. For more outdoor types, punting is a favourite activity. Originating in the 19th century, it allows a tranquil and scenic tour of the city down the River Cam. There is also plenty of green space to enjoy, with the natural fen landscape complimenting the city. Cambridge University Botanical Gardens, Jesus Green and The Backs are popular options for accessing nature.
Cambridge has a lower number of homeowners. Compared to 63.5% of all households in the UK owning their own home, this figure is estimated to be 39.4% in Cambridge. Instead, there are a higher number of renters. Households that are social tenants account for 22.4% of the population, with 36.7% in private rented accommodation. This compares to the UK
total of 17.5% as social renters and 17.8%
renting privately.
The median age in Cambridge is 31 years, compared to the national average of 40 years. Not only is Cambridge a popular location for young people studying and working at the University but also with working professionals and families. 26.5% of the population in Cambridge is 19 years old or younger, compared to the average in England of Wales of 23.1%. In contrast, only 6.9% are aged over 75, somewhat lower than the England and Wales average
of 8.6%.
Cambridge has a very high level of employment with an employment rate for people aged between 16 and 64 of 83.0%, and only 2.2% unemployed. This compares with the UK average of 75.5% and 3.0%, respectively.
Cambridge attracts high-earning families living affluent lifestyles, many of which with accomplished professional careers. Salaries in Cambridge are 22.4% higher than the UK average. Compared to the UK mean salary of £38,131, the average in Cambridge is £46,673. This is reflective of the high value professions in the city, with a business mix skewed towards higher paying roles.
Cambridge railway station is located one mile from the city centre and offers direct rail links to London King’s Cross, Liverpool Street and St Pancras. These commuter routes run frequently and have a journey time of less than an hour. Trains also run to King's Lynn and Ely, Norwich, Leicester, Birmingham, Peterborough, Stevenage, Ipswich, Stansted Airport, Brighton and Gatwick Airport railway stations. A second railway station, Cambridge North, opened in 2017 next to Cambridge Science Park.
The average house price in Cambridge surpassed the £500,000 mark early in 2022 to now sit at just over £534,000. This reflects annual price growth of 13.2%, not far off the national average growth of 13%. In the wider South Cambridgeshire area, the average house price is naturally slightly below that for Cambridge itself, sitting at £460,400. House prices here have risen by just under 12% over the last year.
The Local Housing Market
Average house price
Average house price growth
Average rent
(£ per calendar month)
Annual rental growth
Gross Yield
£534,040
13.2%
13%
£1,440
3.8%
Sources: HM Land Registry, REalyse
Rental rates have indeed been rising continuously across Cambridge and the wider area (and indeed all over the country) over the last 12-18 months as tenant demand remains high while the supply of available stock has declined. As a result, rents in Cambridge have increased by an average of 13% over the last 12 months. Yields have also moved out over the period, moving from 3.6% at the end of 2021 to a current average gross yield figure of 3.8%.
Sources used: Carter Jonas Research, Experian, Google maps, HM Land Registry, Office for National Statistics, REalyse, Rightmove
Notes: REalyse rental data 12-month rolling average
Get in touch
For further information, please get in touch with one of our local experts
Location based on nearby top-performing primary and secondary schools is often a very strong factor in deciding where to move and locate, with proximity to the best schools strongly correlated to local average house prices. Research has shown that homes located near top-performing schools can add anywhere from £20,000 - £50,000 to home values. There are a range of schools in Cambridge including independent, Church of England, Catholic and specialist schools. A large majority are rated as good or outstanding by Ofsted.
Cambridge City Airport is mainly used for training and private charter. However, London Stansted Airport is located about 30 miles south of the city and is easily accessible by road links or direct rail. The airport offers international connects.
The chart below shows just how strong demand and levels of transactions have been in Cambridge and South Cambridgeshire over the ‘pandemic period’ and during the stamp duty rate cut throughout 2020 and 2021. Although sales have moderated since that period, this level of demand put upward pressure squarely on house prices over that timeframe.
Looking ahead, we expect that while overall sales levels will remain below-average for much of 2023, by the end of the year, when mortgage rate levels have stabilised, they will rebound to their longer-run averages. We expect this moderation in sales levels and demand to translate into a modest fall in house prices of around 2% in both Cambridge and South Cambridgeshire next year.
Notes: Rental rates areas: five-mile radius from centre. Projected house price
growth, incomes and demographics data, areas: Respective local authority
2032 forecast
population
(number)
127,247
Ten-year forecast population
(% change)
2%
Proportion of population who are owner occupiers
39%
Proportion of
population who are private renters
37%
Average annual
income
(2022, provisional)
£47,272
Five-year projected house price growth (cumulative)
14%
Email me
01223 403330
Sales
Matt Smith
Email me
01223 403330
Lettings
Anton Frost
