While maybe a little overambitious, and stretching the point a little, but there is one city in the UK which appears to be a slimline version of Silicon Valley in the US. When you bear in mind that Silicon Valley is obviously dominated by technology and science which UK city springs to mind?
Those who follow these particular sectors in the UK may be aware that Cambridge houses some of the UK’s most successful science and technology companies. It is no coincidence that the city has a world renowned university and an array of other educational facilities. So, how does the Cambridge real estate market compare to the rest of the UK?
Rising prices
A report by Hometrack has confirmed that house prices in Cambridge are now 44.7% higher than they were just prior to the onset of the 2007/08 recession. This performance is even more incredible when you bear in mind that the recession was actually based upon a collapse in property prices brought about by a crumbling US mortgage market. It is estimated that the average Cambridge property now costs just over £388,000 although this is still dwarfed by London where the average house is now changing hands at £448,000.
One interesting fact, which would seem to imply a lack of suitable supply, is that homes in Cambridge are selling faster than anywhere else in the UK. Indeed the typical property is now on the market for less than a month and with prices rising we can only assume many are hitting their guide prices? So, how long will this continue and does it have anything to do with the city’s exposure to technology and science?
Science and technology companies
While you very often hear about the multibillion pound science and technology companies spawned out of literally nothing, not all science and technology investments are incredibly successful. However, there is no doubt that the more successful science and technology companies are now based in and around Cambridge and attracting like-minded companies and individuals. This is certainly having an impact upon local real estate with the very strong impression that there is limited supply.
Silicon Valley in the US has a very strong reputation for nurturing new and exciting technology companies and it seems that Cambridge is at this moment in time the UK version. It will be interesting to see if this trend continues in the longer term because with London second on the list showing growth of 44.4% it is another university stalwart in the shape of Oxford in third place at 37.4%.
Wealthy investors
Successful technology companies come and go but they can leave behind extreme wealth if managed correctly. There are very few other sectors which can even match the potential return on investment from successful science and technology operations. While these sectors are often starved of additional funding when economies and markets are struggling, on the flipside they are often the first to attract proactive investors when markets begin to recover.
So, is Cambridge really the U.K.’s answer to Silicon Valley? Similar to London, is the Cambridge real estate market immune from many of the U.K.’s trials and tribulations?