The appeal of investing in Cambridge’s Buy-to-Let market
Growing employment opportunities, improved infrastructure and a fast increasing population, combined with the possible addition of new fast rail links between King’s Cross and Cambridge, make investing in Cambridge property a highly attractive option.
Additionally, according to industry forecasting reports, house prices in Cambridge will grow by 26% over the next five years and rental income is expected to increase by 5% a year. Cambridge already has a strong private-rental sector, with rented property accounting for 28% of all households compared to 18% across England and Wales, driven by thriving local economy, strong house price growth and ongoing development boom. This is attracting an increasing number of investors who now account for nearly 30% of buyers in today’s prime rental market.
According to Oxford Economics forecasts, Cambridge’s educational industry was accounting for nearly a quarter of all employees in 2014. The world famous University of Cambridge, alongside Anglia Ruskin University, and top ranked colleges and schools, attract students from all over the world and consequently keep driving local rental market prices and keep investor’s interest in student accommodation high. Last year need for buy-to-let properties hit a new level of demand, as more parents of students sought to invest, rather than rent student accommodation, while demand for accommodation from young professionals in the city is also strong.
Another two of the fastest growing industries have been ‘human health and social work’ and ‘professional, scientific and tech’. Over the past ten years they have become the second and third largest industries in Cambridge with an increase in the number of employees at 44.4% and 53.4% respectively. Moreover, as more tech businesses move to be based in Cambridge, the town has seen a significant number of science park developments to accommodate. This indicates a continually strong, stable and economically active tenant base that is likely to remain steady, thus continuing to attract investment from both the UK and abroad.
Furthermore, over the past 5 years the property market in Cambridge has gained a significant increase in capital growth rates, providing existing landlords with a well-placed investment that looks set to only further increase in the foreseeable future, and once again proving its strong position on the nationwide property market.
On the other hand, the number of foreign buyers in Cambridge is at the highest level in the country after London, which is also pushing property values up. Mainly due to undersupply and fast-growing population, Cambridge has seen strong developer and investor activity on its region, thus around 2,500 homes have been added for the past 3 years, contributing to over 2.5 % to the existing housing stock. Further developments outside the city boundaries have also benefited housing supply.
On the other hand, according to experts, average earnings in Cambridge are 17% higher than across the UK, and employment seems to be growing strongly over the next couple of years.
