Labour’s recently confirmed plans to create the “Silicon Valley of Europe” along the Oxford-Cambridge Arc could be set to increase local rent values by up to 23% in the next year.
Rachel Reeves has announced plans to create Europe’s own Silicon Valley by reviving the Oxford-Cambridge Arc alongside the continued development of the proposed East West Rail route.
Now new insight from Zero Deposit has revealed the potential impact the project is going to have on rent values across the area.
Over the past year, the 12 locations that will have train stations along the proposed East West Rail link which will serve as the transport backbone for the Oxford-Cambridge Arc have seen an average rent price increase of 7.8%, giving an average price for the region of £1,346 per month.
BIGGEST PRICE INCREASE
Bedford has seen the biggest price increase of 9.5% to give a current average rent price of £1,084 per month.
Cambridge is set to have two stations along the Arc, Cambridge and Cambridge South. Over the past year, the average rent in Cambridge has grown by 9%, leaving the average price at £1,747 per month.
Central Bedfordshire will also have two stations on the line, Tempsford and Marston. Here, the average rent price has increased by 8.8% on the year to give an average rent price of £1,160.
In Oxford, rents are up 8.6% to sit at an average of £1,789 per month, while the average rent in Cambourne, South Cambridgeshire, currently sits at £1,327 after annual growth of 8.2%.
VALUE BOOST
Using the past year’s rent price increase as a guide and with the addition of the 12% average increase to rents that comes as a result of major infrastructure development, Zero Deposit has forecasted how local rents might increase over the coming year .
Across the 12 stations, the next year has the potential to see rent prices increase by an average of 21% which will give an average monthly rent value of £1,623 across the Oxford-Cambridge Arc.
Bedford is expected to see the largest increase of 23% which will result in an average rent price of £1,328 per month.
Homes located close to the two Cambridge stations will see an increase of 22% to create a monthly price of £2,131, while the two South Bedfordshire stations will also see a rent boost of 22%, leaving the average price at £1,413.
Oxford and Cambourne are set to see rent values boosted by 21%, which will mean the average monthly rent will sit at £2,173 and £1,607 respectively.
WORLD-LEADING HUB
Sam Reynolds, Chief Executive of Zero Deposit,says: “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.
“Deposit alternatives should therefore be a priority for local landlords who will be able to provide tenants with a more affordable route to renting, leaving more cash in their pockets that will be essential for helping them settle into their new lives while also getting their feet under the table at new workplaces.”
RENTERS’ RIGHTS BILL
And he adds: “Furthermore, the likely introduction of the Renters’ Rights Bill will prohibit landlords from demanding more than one month’s rent in advance. This reduced deposit collateral might result in landlords feeling they have less protection against property damage and rogue tenants.
“By adopting a deposit alternative, landlords can maintain the level of protection they require without forcing tenants to hand over unaffordable amounts of cash.”
* Zero Deposit has looked at the potential boost to the rent prices across the Oxford-Cambridge Arc as a result of the project, based on the average rate of rent price growth over the past year in each local authority district that houses a East West link train station*, plus the average 12% development-related rent value boost that can occur as a result of major infrastructure and transport network development projects.
