Rent boom predicted for the ‘Silicon Valley of Europe’

The government’s plan to establish a ‘Silicon Valley of Europe’ along the Oxford-Cambridge Arc could cause local rent prices to rocket by as much as 23% within the next year, one firm predicts.

Chancellor of the Exchequer, Rachel Reeves, recently outlined proposals to revitalise the region, coupled with ongoing development of the proposed East West Rail line.

Rent alternative provider Zero Deposit has examined the potential impact on rents and is projecting an average 21% rent increase across the 12 locations in the coming year.

That would see an average rent of £1,623.

Bedford could see a 23% jump to £1,328, while Cambridge and Central Bedfordshire are predicted to see 22% increases, reaching £2,131 and £1,413 respectively.

Oxford and Cambourne may experience 21% growth, with average rents of £2,173 and £1,607.

New demand to the rental market

The firm’s chief executive, Sam Reynolds, said: “The Oxford-Cambridge Arc is already home to well-established tech companies such as Microsoft and Amazon, and it’s hoped that this development of the region will further increase its standing as a world-leading hub of technology, business and innovation.

“This will result in huge job creation for the area which will bring new demand to the rental market and rent prices will inevitably increase as a result.

“Many of the new jobs will be highly desirable and relatively well-paid, but with rent prices having the potential to surpass £2,000 a month in some locations, people are still going to face an immense affordability challenge.”

Average rent growth

Zero Deposit’s forecast considers the average rent growth in areas near future East West Rail stations, along with the typical 12% rent bump seen with major infrastructure projects.

Over the last year, these 12 locations have had a 7.8% average rent increase, reaching £1,346 monthly.

Bedford saw the largest rise at 9.5%, now averaging £1,084.

Cambridge, with two planned stations, saw 9% growth, averaging £1,747.

Central Bedfordshire, also with two stations, witnessed 8.8% growth, averaging £1,160.

Oxford rents increased 8.6% to £1,789 and Cambourne, South Cambridgeshire, saw 8.2% growth to £1,327.