Tech clusters outperform average UK house prices

Property investors should look to tech clusters when deciding where to buy, according to research by crowdfunding platform Property Partner.

Tech clusters outperform average UK house prices

Drawing on data from Tech City UK and the ONS, Property Partner has examined house prices in the areas with the highest concentration of digital technology companies and workers. It found that prices in the top ten clusters outside London outperformed the UK average by up to 32% over the past five years. For instance, the top three most established tech hubs – Cambridge, Reading and Oxford – have seen property prices increase by 31%, 32% and 22% respectively since 2011.

The research (see table below) also shows that Manchester, Southampton, Ipswich and Leicester saw house price growth outperforming the rest of the UK by 1%, 3.7%, 3.1% and 3.8% respectively over the past 12 months. Home to Amazon and American Express respectively, Bristol and Brighton saw local prices rise by 15% over the past twelve months and 45% over 5 years.

Proximity to London may be a contributing factor in tech-driven house price growth said Daniel Gandesha, CEO of Property Partner, explaining why Exeter did not see the same levels of growth.

“The digital economy is expanding rapidly, creating new jobs and opportunities across the UK – but it’s not evenly spread,” he said.

“Innovation, creativity and entrepreneurship in the tech sector is not only transforming everything we do on a daily basis but is also strengthening the British economy.

“For property investors, it’s a case of following the tech jobs.”

 

The table below lists the top 10 tech hubs in the UK, by the concentration of digital technology workers, alongside house price performance in the past five years:

Location Tech concentration(Tech jobs per 1,000 residents) Average house prices July 2011 Average house prices July 2016 % change 1 year % change 5 years Performance v UK average over 5 years
Cambridge 15 £278,894 £442,518 8.4% 58.7% 31%
Reading 14 £192,547 £307,718 18.5% 59.8% 32%
Oxford 13 £277,502 £415,484 6.2% 49.7% 22%
Manchester 10 £122,780 £151,944 9.3% 23.8% -4%
Southampton 10 £150,874 £198,642 12.0% 31.7% 4%
Exeter 7 £196,810 £235,848 6.5% 19.8% -8%
Ipswich 7 £130,930 £177,998 11.4% 35.9% 8%
Leicester 6 £118,935 £151,541 12.1% 27.4% -1%
Brighton 6 £245,827 £355,688 14.4% 44.7% 17%
Bristol 6 £175,367 £255,168 15.4% 45.5% 18%
UK average   £170,965 £219,515 8.3% 28.4%  

Sources: * Tech jobs per 1000 residents – Tech City UK/ONS, House price data – Land Registry

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