Cambridge leads the way in city house price rises

House price rises in Cambridge are outstripping those in all the other 20 major cities in the UK, including London, according to the latest survey from property market analysts Hometrack.

Cambridge university and city centre
The report said that, in the year to the end of April, the Cambridge property market recorded a 15.8 per cent increase, compared to 14.4 per cent in London. Average house price inflation across all 20 cities was 10.4 per cent.However, the average house price in London is still higher – £466,000 compared to an average of £411,900 in Cambridge.More significantly, perhaps, is the fact that price growth in Cambridge is now surging ahead of that in arch rival Oxford where, after double digit gains in recent years, annual price growth has now fallen to 7.1 per cent. Average house prices in Oxford now stand at £393,100.Richard Donnell, head of research at Hometrack, said the change of fortunes between the UK's two leading university cities was because Oxford had few new builds compared to Cambridge, with recent figures showing only 100 new homes were completed in the former last year, compared to 730 in Cambridge.Mr Donnell added that Oxford’s property market had also cooled owing to “affordability pressures, lower levels of employment growth compared to Cambridge, and the fact that it's slightly further away in terms of connections to London". Meanwhile, in Cambridge, companies such as Spotify, Microsoft and Apple had helped boost its hi-tech economy, boosting salaries and allowing the city to retain its graduates, maintaining a buoyant property market. In a separate report, Knight Frank's House Price Sentiment Index for May showed that show current sentiment remained strong despite some market uncertainties surrounding the June 23 referendum on the UK's membership of the European Union.The survey showed that households in all UK regions believed that the value of their homes rose in May with Londoners and home-owners in SE England perceiving the strongest rate of price growth over the course of the month. Grainne Gilmore, head of UK residential research at Knight Frank, said, “The steadiness of the headline house price sentiment index during such political uncertainty over the EU is a reflection that the fundamentals of the market remain unchanged – there is still an imbalance between demand and supply of housing, and for those with access to deposit payments, mortgage rates are still near record lows.“However, there has been some softening in sentiment among those aged 55 and over – the age-group who have the largest equity stake in the UK housing market. While the sentiment reading for this group is still one of the highest, indicating they expect prices to rise, there has been a notable fall from last month, indicating that the current economic and political climate is affecting some corners of the market.” 

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