Cambridge is first and foremost a university city with many students and young people needing affordable accommodation. This unfortunately is something Cambridge does not have enough of. Like many other places Cambridge is now experiencing a higher demand that supply. More and more people are renting in the city because they cannot afford to get on the property ladder.
New blocks of flats have been erected in Cambridge city centre next to the railway station. It is a triangular shaped development with 180 flats over five floors. The first were completed in August 2006, the second phase was ready in March 2007 and the third phase will be finished by the end of the year. The flats can hardly be called affordable housing as the 2 bed flats are retailing at over £450,000. Investors have brought most of them and now only six remain unsold. The have already increased in value by £30,000 to £40,000.
Investors however should be aware and perhaps take on board that not all of these flats have been easy to re-let, probably because of the size of the complex and the fact that they are all the same.
Major residential developments over the next ten years have been planned for areas on the fringes of the city. It is hoped that 16,900 new homes will be built but types of property nor the amount of investment has yet been decided but it is understood that affordable housing is badly needed.
An area five miles from Cambridge, Northstowe, is to be greatly developed into three separate communities. The area is to include affordable housing, homes for first time buyers and shared ownership. It has been designed to include parks and green spaces, a town centre, local shops, a secondary school, six primary schools and twenty play areas.
These plans are expected to be in by October 2007. If all agreed, infrastructure will begin in late 2008 and building work will start in 2009. The whole development should be completed by the year 2016.
Property in the city increases at a rate of 20%pa and housing in surrounding areas rises at a rate of 10%pa.
It is proving to be a better investment to buy out of the city as yields for houses are around 1% higher on the outskirts of the city compared to flats in the city centre.
Retail property is also in demand and new schemes have been agreed, some of which are already under construction.
Retail rents in Cambridge are at the £250sq ft level with prices expected to rise to £280sq ft by the end of the year. The yield on retail properties remained at 3.7% all year.
With the amount of development expected to take place in and around Cambridge the area looks good for buy to let investors looking for long term capital rises.
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