The rental market is regularly changing; from new government legislation, changes in the economic landscape and even natural occurrences such as a rise in population. This means there is no strict formula to working out the best type of property to rent out in any particular area. However, despite the ever-uncertain variables, we can use past and current data to get a pretty good idea of what your demographic demands. We have analysed data from the past 12 months to give you an accurate representation of the Cambridge market and to put you in-the-know for you next potential investment purchase.
Local Profile:
Cambridge’s population increased by over 10% between 2011 and 2021 which has had a substantial affect on the rental market as we know it today. So out of the 266,989 residents currently in Cambridge, how many are actually renting? We found that 22.6% of residents are in private rented accommodation, almost 4% higher than the East of England overall.
Occupants:
What does the average Cambridge occupant look like? We found that a whopping 42% of those aged between 25-34 years-old are in private rented accommodation, making this group the predominant age group in the market, with the average age of renters being 32 years-old. The majority of these tenants are likely to be one-person or family households based on the same data.
Socio-Economic Profile:
We have all heard the golden saying in real estate of “location, location, location”. If we dive in deeper, past the most sought after streets and local hotspots, we can be really clever about where we invest our money. The highest percentage (35.5%) of workers in Cambridge are in Public Admin, Education and Health, with most tenants being in higher managerial, administrative professional occupations. You can increase your chances of finding a tenant by choosing a property in close proximity to these types of businesses.
With that said, 44.9% of the Cambridge working population work from home, so location may not be issue for them, but it would be wise to invest in a place that can offer an additional office space inside or on the grounds of the property. For those travelling to work, 31.1% take their car so another take-away from this would be to ensure there is parking at the property.
Cambridge has also been announced as the second most expensive place in the UK outside of London to have a garden which makes this amenity a hot commodity!
If you are in the business of student accommodation, 16.5% of rental market is made up of students. The amenities you should consider here are bike storage, proximity to educational facilities and of course, the city centre.
Local Lettings Figures:
The average monthly rent in Cambridge in the last 12 months is £1,158 per calendar month. The most popular housing choice for renters is flats/apartments, terraced and semi-detached homes, so let’s dial in on these.
40% of lets in the past 12 months were flats, averaging £1,178 per calendar month, almost £40 more than houses overall! Flats have also seen a 9.96% increase in rent in the past 12 months and more impressively, 19.6% in the past 5 years. Two bedroom flats have been let the most this year, taking up 21.7% of the market share. The average rent of these two-bedroom flats is approximately £1,300 per calendar month. However, 1 bed and 3 bed flats have seen the highest increase in average rent of between 12%-15%, 2 beds have also increased but by a lot less, sitting at 3.93%.
Terraced homes are the second most predominant housing type in Cambridge this year, taking almost 30% of the market with an average rent of £970 which is below the market average for Cambridge. Unfortunately for terraced homes, they have seen a decrease of -25% in average rent over the past 12 months. In essence, although a popular choice for renters, they do not seem to be in the best position for Landlords looking for maximum return on investment.
Semi-detached properties have a promising outlook, being the third choice for lets this year with 24.1% of the market and an average of £1,330 per calendar month which is only £9 less than detached properties! But, how many bedrooms? 3 bed homes average £1,484 per calendar month which is actually higher than 4+ bed homes in Cambridge.
Summary:
Target Market:
- 25-34 year olds
- Single professionals or families
- Professionals in the Public Admin, Education and Health
The Property:
- 1 and 3 bed flats or 3 bed semi-detached properties currently offer the best return on investment
- 2 bed flats are still a good choice for average rent and high occupancy
- Parking for at least one car
- Ideally an additional room or space for an office
- An outdoor space such as a courtyard or garden
- Located within proximity to large local area employers, education and conveniences
