Cambridge’s housing affordability challenge: Failure to act will have ‘profound’ impact, warns report

A stark warning has been issued that Cambridge must tackle its housing affordability challenge now – or it will struggle to attract and retain a younger workforce.

Failure to act will have a “profound” impact on the city’s economic growth and the delivery of public services, a new report warns.

The average house price in the city - £450,000 - is now 12.6 times the typical income (£35,686) of those working in the area, based on ONS figures – up from 4.4 times in 1997.

And the private rental market is one of the most expensive in the country, with the average rent for a one-bedroom property now standing at £1,000 per month.

The research, conducted by business and academic member organisation Cambridge Ahead, used data from property firm Savills to assess the challenges facing under-35s in the city.

Dan Thorp, director of policy at Cambridge Ahead, said: “The popularity of the Cambridge city region as a place to live and work brings challenges at the same time as opportunities – heightening a housing affordability crisis which means the city struggles to retain vital younger workers.

“Our report shows that younger households are only able to access a very small proportion of the homes on sale and that average rents easily exceed a third of median average salaries. This causes many younger households to live in shared housing within the city or in nearby towns, which puts even greater stress on an already overworked infrastructure.

“The ongoing success of Cambridge relies on our ability to attract and retain young people to live and work here – if we fail to act the

long-term impact on business growth and public service delivery will be profound.”

The report, created with the support of Cambridge Ahead’s Young Advisory Committee, groups young people who want to live and work in the city into four key ‘tribes’, which are:

• Worker Bees – people in their first job, who make up about 13 per cent of under-35s in the Cambridge travel to work area, or 8,577 households;
• Cambridge Cogs – essential workers who keep the city running (15,660 households);
• Limbo Landers – people who have grown up in the city and want to remain in the place they call home (14,000 individuals); and
• Space Cadets – those looking to get a foot on the housing ladder for the first time but choose to settle in outlying towns and villages because they cannot afford to live in the city (2,991 households).

These groups were based on the Young Advisory Committee’s own experiences, surveys of young professionals and conversations with stakeholders.

“We hope this work will provoke a discussion with and between those that set housing policy, and those who bring forward major developments in our city region,” said Dan.

“Policy makers and developers must work together to develop solutions which meet housing needs now, and in the decades to come – exploring intermediate rental models, purpose-built rental accommodation, co-living, compact housing and other ideas to meet the varying preferences of young people according to their life stage and priorities.”

The challenge of attracting and retaining staff is a key one for Cambridge University Hospitals (CUH) NHS Foundation Trust, which runs Addenbrooke’s and the Rosie.

In May, a meeting of the trust’s board of directors heard the housing affordability problem had “never been more acute” and was exacerbating staff shortages.

Although CUH rents whole housing blocks in the city, the board heard 20 potential staff are being turned away every month as the trust cannot find them somewhere to live.

“It is a problem and currently we have no solution to it,” said director of workforce David Wherrett.

The University of Cambridge identified the problem decades ago, and set about designing and building Eddington, in north-west Cambridge, which has created an entire community for young researchers.

It is not something CUH can hope to emulate, so it will be relying on the significant house-building plans laid out in the emerging Local Plan from Cambridge City Council and South Cambridgeshire District Council to change the status quo.

Those plans – indicating where 48,794 homes will be built in Greater Cambridge over the next 20 years – have attracted their own controversy, of course, with many fearing the impact on infrastructure and the environment.

The new report offers fresh insight into the mindsets of young workers seeking to settle.

Abigail Jones, a director within the development team at Savills Cambridge, added: “Importantly this research looks at the preferences of groups of younger people, and the trade-offs they are prepared to make depending on their circumstances – whether they prioritise, for example, personal space, social interaction, proximity to work, access to frequent public transport, or many other conditions.

“Understanding these dynamics is crucial in finding viable and realistic options to better meet the housing needs of younger people in a highly pressurised housing market.”

[Read more: The six guiding principles that Cambridge needs to achieve sustainable growth]

But the challenge is not merely about bricks and mortar, but the type of housing products and their route of market – such as shared ownership and rent-to-buy models – that are provided.

“Balancing the needs of different types of households in terms of both price point and tenure, along with delivering homes that allow for sustainable lifestyles, is a conundrum and a priority,” added Abigail.

Ian Sandison, CEO of Cambridge BID, which represents businesses across a large area of the city, is well aware of the challenges for those at many city centre businesses, especially in hospitality, to attract and retain staff.

He told the Cambridge Independent: “This new report from Cambridge Ahead is very interesting and it really confirms the real housing challenge that lower-paid workers face in the city.

“The average pay of workers in retail hospitality and leisure is below the £26,000 of the Limbo Lander tribe in the report and they can’t afford any houses in Cambridge. Add to this the fact that many of the local towns and villages are housing targets for the other, better paid groups, then we really are condemning lower paid workers to a long commute, probably by car, since the public transport network is rather incomplete.

“It is important that residents and politicians, who are so keen to limit access to the city, understand that doing so will make Cambridge not only an unaffordable place to live, but an unattractive place to work and the current hiring crisis in the service economy will continue.

“Cambridge has very little space to create centrally-based innovative housing solutions, but we would welcome the various local authorities with responsibilities for housing to review this report and see what can be done to solve the issues raised.”

The full report can be found at cambridgeahead.co.uk.