The UK property market is experiencing a fascinating shift as certain regions transform into housing hotspots, thanks to a phenomenon The Telegraph calls the ‘brain gain.’ This surge in demand and property value is closely tied to the increasing presence of high-tech and life sciences industries in these areas. Understanding this trend is essential for those considering investing in UK property, as it could significantly impact where the next big opportunities lie.
The Nexus Between High-Tech Jobs and House Prices
Recent research has highlighted a remarkable pattern: locations housing a significant number of workers in specialized sectors like computer programming and life sciences are witnessing substantial increases in property prices. For example, in areas where over 5% of the workforce is in computer programming, consultancy, and related services, the average house price stands at an impressive £679,835. This figure dwarfs the £199,066 average house price in regions where less than 1% of the workforce is in these industries, according to property experts at Savills.
The American Parallel
This isn’t a trend unique to the UK. The United States has seen similar market dynamics, with cities like Boston, San Francisco, and regions within the Sun Belt experiencing a boom in housing demand and prices, fueled by the expansion of the life sciences sector and a flourishing lab economy since 2020.
The Thames Valley Boom
In the UK, the Thames Valley is a prime example of this trend. Here, the number of sizable businesses in sectors like computer programming has grown by 32% from 2017 to 2022. High average salaries around £62,000 in these sectors are pushing house prices up, particularly in already affluent areas like Finchampstead and Ascot in Berkshire.
The Ripple Effect of Science and Tech Industries
Lucian Cook of Savills notes a shift away from London, with new hubs sprouting outside the capital. Towns and villages around Oxford and Cambridge, renowned for their universities, are now becoming increasingly popular due to the expansion of scientific research and development sectors.
The Transformation of Cambridge
Take the case of Vassilis Stylianopoulos and Janice Bell, who relocated from Switzerland to Cambridgeshire. They chose the location for its proximity to potential job opportunities and accessibility. Their renovated home in Fulbourn is a testament to the allure of these emerging hubs and is currently on the market for £1.2 million.
The Magnetism of Tech and R&D
In Cambridge, estate agency Cheffins observes that a third of their sales are to individuals from tech, R&D, and AI sectors. The presence of global corporations like AstraZeneca has transformed the city into a center for innovation, creating a high demand for properties within a five-mile radius of the city center.
The Expansion of the High-Tech Commuter Belt
From London to the Countryside
The growth in high-tech and science jobs isn’t confined to cities. It’s creating ‘mini belts’ around places like Oxford, Cambridge, and parts of the Thames Valley. As people seek value or quality of life, they’re willing to look further afield, beyond the traditional commuter belts around London.
A Demand for Rural Living
Higher earners, especially those not bound to a five-day office routine, are gravitating towards rural properties, adding pressure to local house prices in areas around Oxford. The desire for a country feel and environmental considerations are driving the market towards refurbished homes that embrace sustainability.
The New Prime Market Demographic
In the prime market, buyers are now typically in their late 20s to early 30s, a notable shift from the mid-40s demographic of previous years. These younger buyers often seek refurbished, eco-friendly homes.
Conclusion: The ‘UK Silicon Valleys’ and Property Investment
The burgeoning ‘UK Silicon Valleys’ are reshaping local property markets. Understanding the interplay between the influx of high-tech and science jobs and regional property values is crucial for potential property investors. The trend signals a shifting landscape, where the next property investment hotspot could very well be determined by the next tech hub or life science cluster. This ‘brain gain’ is more than a mere market fluctuation; it’s a profound evolution of the UK’s property investment scene.