Tom Fraser, head of office at UK Property Forums partner Savills in Cambridge, offers his thoughts on how housing affordability could hinder Cambridge’s economic growth.
Cambridge’s status as a world leader in the life science and tech sectors could be at risk unless more steps are taken to improve housing affordability, according to new research.
The far-reaching report, from Savills, warns this will be no easy task – with the demand for new homes having to be balanced with protecting the city’s rich heritage and promoting its environmental goals.
The research says if Cambridge is to continue to rival and outpace other regional centres then it must tackle issues around housing affordability and the delivery of new homes as a priority.
Tom Fraser, head of office at Savills Cambridge, said: “The appetite for Cambridge’s office and laboratory space continues to grow and the market remains buoyant – spearheaded by its world-leading expertise in the life sciences, pharmaceuticals, biotechnology, IT and engineering sectors.
Productivity growth is 24 per cent ahead of the national average and value-added per worker is set to overtake London later this year, achieving a six per cent lead by 2030. So the picture is extremely healthy. But that can’t continue without a step change in development. Already demand for lab and office space outstrips supply. And we need more housing to keep homes from becoming even less affordable.
Property prices have increased by an incredible 241 per cent since 2001 – which at its peak was an eye-watering 13.5 times greater than local average earnings. This has stretched affordability and means the city struggles to attract younger and less affluent workers – including key workers.
A significant number live outside the city in nearby towns and villages and if this continues then it could have negative consequences for footfall and the retail and leisure offering. There is also a risk of losing potential workers who reject the commuter lifestyle and would rather live in a more affordable city with an easier journey to work.”
The report says that if Cambridge is to balance its need for new homes with its environmental ambitions then more properties will have to be built closer to the city centre or there will need to be greater investment in ‘green’ transport schemes.
Tom continued: “To make a dent in affordability many more new homes are needed. And a key challenge will be how Cambridge continues to adapt to its changing needs without losing its rich vibrancy and diversity in character.
It’s not just a case of building more homes for the sake of it. There needs to be a well-targeted policy with homes of the right type – for ownership and rent – built in the right place to suit everyone from singles and couples through to families.
The new housing supply currently on the horizon is largely focused on delivering large, relatively low-density sites on the city fringe. But it’s an inconvenient truth that these sort of sites tend to be worse for the environment, as greater reliance on cars means emissions per person tend to be much higher than in denser, more central locations.
These edge of city developments do not necessarily tally with Cambridge City Council’s environmental aims – which has a target of achieving carbon net-zero by 2030.
Focusing on increasing residential density in the city centre would help with reaching sustainability targets as well as attracting and retaining younger households within the city itself. However given the heritage challenges of building centrally, it is understandable that the bulk of new housing will continue to be on the edge of the city.
This will mean more journeys to and from the centre, even if the current trend of working from home continues. Facilitating these journeys in a sustainable manner, such as with regular environmentally friendly busses or greater investment in rail or tram networks, should therefore be a priority going forward.”
To read Cambridge – Thriving on Innovation in full, click here.
Image source: Savills
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