Major Infrastructure Development to Drive Rental Growth Along Oxford-Cambridge Arc

New data suggests that rental prices across the Oxford-Cambridge Arc could surge in the coming year. The region, which spans key locations between Oxford and Cambridge, has already seen steady rental growth, however, recently announced government infrastructure projects transforming the region into ‘The Silicon Valley of Europe’ could further accelerate this trend. Join us as we discover how much rents could rise and where the biggest gains are expected.

Rental market growth across the Oxford-Cambridge Arc / Corridor

Over the past 12 months, rental prices in the 12 locations along the Oxford-Cambridge Arc (Oxford-Cambridge Corridor), which are set to receive new train stations as part of the proposed East West Rail link, have increased by an average of 7.8 per cent, with typical monthly rents now at £1,346 across the region.

• Bedford recorded the strongest annual rental growth at 9.5 per cent, pushing average rents to £1,084 per month.
• Cambridge, which is set to benefit from two new stations (Cambridge and Cambridge South) saw a 9 per cent rise, bringing the average rent to £1,747 per month.
• Oxford followed closely behind Cambridge, with an 8.6 per cent increase and its average rental price reaching £1,789 per month.
• Central Bedfordshire, which will include new stations at Tempsford and Marston Vale, saw rents grow 8.8 per cent to £1,160 per month.

The impact of infrastructure development

Alongside East West Rail link development, further major infrastructure projects such as the building of 4,500 new homes and associated community spaces such as schools and leisure facilities, as well as office and laboratory space in Cambridge city centre, nine new reservoirs, a specialist cancer research hospital and similar development plans for Oxford have been announced by Chancellor of the Exchequer Rachel Reeve in a recent speech. She said: “Just 66 miles apart these cities are home to two of the best universities in the world two of the most intensive innovation clusters in the world and the area is a hub for globally renowned science and technology firms in life sciences, manufacturing, and AI.

It has the potential to be Europe’s Silicon Valley. The home of British innovation.”

Projected rent growth along the Oxford-Cambridge Arc

With research indicating that major infrastructure development typically adds 12 per cent to rental values in surrounding areas, data from Zero Deposit suggests the Oxford-Cambridge Arc could experience a combined 20.6 per cent rise in rental prices over the next year (see table).

• Bedford is projected to see the largest increase, with rents forecasted to jump by 22.5 per cent to £1,328 per month.
• Cambridge and Cambridge South could see rental values rise 22 per cent, reaching £2,131 per month.
• Oxford is expected to see a 21.5 per cent increase, pushing average rents to £2,173.
• Central Bedfordshire locations (Tempsford and Marston Vale) are forecast to experience a 21.8 per cent rise, bringing monthly rents to £1,413.

Sam Reynolds, CEO of Zero Deposit, which conducted the research, commented: “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.”

With rental demand set to rise alongside economic and employment growth in the region, investors and landlords may find opportunities in the key areas benefiting from this major infrastructure push.