Last weekend, Government plans to invest considerably in Cambridge as ‘Europe’s Silicon Valley’ made national news headlines.
Delivering up to 250,000 additional homes over the next two decades, this is intended as part of a blueprint to fix England’s housing crisis and unleash growth in life sciences and technology.
‘Cambridge 2040’ also includes identifying large swathes of land for business parks, laboratories and science hubs alongside proposals for sustainable public transport.
If fully implemented, it could effectively treble the size of the city, bringing its population, currently at 145,000, in line with that of Bristol or Manchester.
With the average Cambridge house price over nine times the average salary, the need to address supply and demand in the housing market and increase the availability of homes for key workers is long over-due.
William Rooke, partner in Carter Jonas’s commercial team, said: “Cambridge is a world-class city, key to UK plc and the future economic prosperity of the country.
“Currently home to over 26,000 businesses and generating total revenues in excess of £48bn, the city has experienced considerable growth and has an unparalleled potential to expand on this. We are seeing current occupier demand for over 1 million sq ft of science and tech space which cannot be accommodated within the city’s present stock.
“The identification of Cambridge as central to the Government’s growth strategy demonstrates the importance of employment-led growth, specifically in the rapidly expanding tech industries.
“Those companies already located here have shown a considerable appetite for augmentation and the city is uniquely placed to host both established and growing companies, in AI, green technology and other emerging sectors.”
Colin Brown’s planning and development team at Carter Jonas has overseen much of the city’s growth in recent decades. He said: “Cambridgeshire and the surrounding area is well placed to deliver on the growth agenda provided that it is coordinated and supported by necessary critical infrastructure. To deliver an additional 250,000 homes alongside commercial development, transport and community infrastructure by 2040 is however ambitious in the extreme, and would mean development proceeding at a wholly unprecedented rate.
“To my mind delivery of anything even approaching that level of ambition would require a development corporation with wide planning and land assembly powers to be established quickly and for the vision to take into account significant known constraints, including the already overstretched demand on roads, the need for major public transport infrastructure, and water availability.
“It would mean substantial revisions to the local plans already in place and effective coordination between the public and private sectors and critically, Central Government. I do not doubt the potential of Cambridgeshire to work towards this considerable ambition, but a strategic approach is imperative to delivering growth effectively and one suspects it will take well beyond 2040 to do so.
“Cambridgeshire is currently delivering one of the highest levels of housing in the country. There are currently plans to deliver a further 52,000 new homes in Greater Cambridge by 2036, 37,000 of which are already committed to in new settlements such as at Waterbeach and Northstowe.
“To accelerate housing delivery even further on sites as yet unidentified requires strategic planning to move at a considerably faster rate than we have seen recently and would require a large range of development locations to be identified.
“The Oxford Cambridge Arc, although much spoken about, is yet to be realised and there is potential for Cambridge’s expansion to progress along the (as yet unconfirmed) tracks of the East West Rail line.
“But the failure of the Arc to move beyond being a ‘concept’ also provides a lesson to Cambridge 2040: that little will materialise without a coordinated plan led by a powerful delivery vehicle and with clear and defined Central Government support and funding.’
Abigail Jones, director in the development team at Savills in Cambridge, said: “The issues around housing affordability in Cambridge are well known and any move to try and address that is welcome.
“Younger households are only able to access a very small proportion of the homes on sale and average rents are a significant proportion of many salaries. This causes many younger households to live in shared housing within the city or in nearby towns, which puts even greater stress on an already overworked infrastructure.
“The potential to create connected, sustainable, green communities is an important priority. The ongoing success of Cambridge relies on its ability to attract and retain young people to live and work here and if we fail to act there will be a long-term impact on business growth and public service delivery.
“However any future development needs careful consideration – and consultation – with stakeholders. The city is surrounded by greenbelt, so there would have to be a change of policy in that respect, while planning authorities may also have to look at surrounding areas and villages.
“There are a number of new neighbourhoods already under construction or planned across the city – Cambourne, Eddington, Waterbeach, Darwin Green, Alconbury Weald and Northstowe for example – and policy makers and developers will have to continue to work together if they are going to address housing needs in the decades to come.
“But it’s not just about the number of homes. New funding would present an exciting opportunity for developers, planners and local authorities to deliver a variety of housing products and tenures supported by appropriate infrastructure, community facilities, public open space and environmental enhancement.
“This includes building more affordable housing for sale, but also exploring intermediate rental models, purpose built rental accommodation, co-living, compact housing and other ideas to better suit the needs of the younger population. Understanding these dynamics is crucial in finding viable and realistic options to Cambridge’s future growth.”
Philip Woolner, joint managing partner at Cheffins, said: “The announcement that Michael Gove is proposing the development of 250,000 new homes in the Cambridge region in an attempt to turn it into the UK’s version of Silicon Valley has been met with trepidation.
“While it makes sense to capitalise on the dominance of Cambridge in the UK life sciences and wider tech sectors, it is essential that the Government is careful not to kill the golden goose.
“Too much development without major pre-planning for services and infrastructure could be damaging to the elements which makes this area so attractive to many. Both world-leading corporations and individuals come to Cambridge because of the lifestyle on offer; the schooling, the countryside and the beauty of the city, not only for jobs.
“Unless Mr Gove clearly lays out his plans on how to address the area’s infrastructure issues including transport and utilities, and exactly how this development can be built sympathetically, there is likely to be little support from the local community.
“It should also be noted that Silicon Valley is hardly an exemplar of sustainable development; it has seen a major urban sprawl with little planning, which has created shortages of housing, infrastructure and resources. And there are also queries to be raised about how this plan fits within the wider levelling up agenda.
“Initially plans had been to spread wealth to other areas of the country, and this announcement, combined with the £1.9bn-worth of housing funds which Mr Gove’s department has returned to the Treasury, leaves question marks over the prevalence of an overarching industrial and business strategy.
“While we all believe that the knowledge economy will be what drives the UK’s growth, this needs to be given a measured approach, spreading the wealth and the development throughout the country.
“It can’t be denied the need for life sciences space in the Cambridge Cluster is becoming increasingly acute. Some demand has been satisfied, however there is still a vast level of requirement within the market, with supply having been tantamount to zero for two years now. This has led to prices growing at pace, with rents now in the region of circa £65 per sq ft for the most sought-after locations.
“It is certainly important that Cambridge is able to service these requirements and remain attractive for the leading life sciences occupiers, however development of lab space is quite different to tripling the size of the city in only two decades.
“Cambridge is already a centre of investment, and saw Blacksone’s BioMed investing circa £850 million into delivery of lab space throughout the Cambridge Cluster in 2021. This record level of investment which is set to provide over 800,000 sq ft of space has underpinned the future expansion of the Cluster, however the announcements made by the Government go quite a few steps further. And while this could potentially be a fantastic news story for corporate Cambridge, the region’s suffering services need to be taken into account.
“There is no doubt that demand in Cambridge is huge, for both housing and for commercial property. However it appears that Mr Gove has somewhat shot from the hip with this announcement, with little detail on how, why and when the Government intends to start this plan and whether this will form part of a larger overarching industrial strategy for the nation.
“It is a clear recognition, however, of the importance of Cambridge and the surrounding region to the UK economy, but without a wider context, it does seem to be putting a lot of eggs in one basket.”
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