The ‘brain gain’ hotspots driving a house price boom

Research hotspots where life science and computer programming companies have set up home have witnessed above average property price spikes, new research reveals.

The average house price in areas where the number of those employed in computer programming, consultancy and related services exceeds 5pc is £679,835, according to Savills. To put that into context, the average house price in areas where these workers make up less than 1pc of the workforce is £199,066. 

A similar impact of science and tech hubs on property markets has already been felt in America. The growth in life sciences and the lab economy from 2020 onwards has added to housing pressure in high-cost cities such as Boston, San Francisco and San Diego, as well as hubs in the so-called “Sun Belt”. 

Austin in Texas is home to offices for established tech giants such as Apple, Google, and Facebook as well as start-ups and cutting-edge research institutions and has seen house prices increase by 50pc over the past five years.

Computer programming and other related jobs make up a high percentage of the workforce in the Thames Valley. The number of businesses in this sector with more than 50 employees grew by 32pc between 2017 and 2022. 

While the average salary across the UK for someone working in this sector is around £62,000, according to the recruiting site Glassdoor. This has led to higher house prices in already high-value locations nearby including Finchampstead and Ascot in Berkshire.

The scientific research and development sector is also pushing up house prices in towns and villages surrounding Oxford and Cambridge.

“Financial and business service sectors have driven much of the housing wealth in London and its commuter belt since the mid 1980s,” says Lucian Cook, of Savills. 

“Now we are seeing a shift in gears as new hubs are developing outside of the capital.”

While computer programming and related services have become dominant along the Thames Valley and around Old Street in London, the expectation is that scientific-related jobs will be the next wealth generator. 

“Where people in those industries live is likely to have an impact on the local market,” says Cook. 

More than 11pc of those aged 16 and over in employment in London, the South East and East are working in computer programming, consultancy and related activities.

The numbers in scientific research and development are far smaller but the sector is growing. Figures from Savills reveal that companies in this field employing between five and 50 employees has grown by 35pc between 2017 and 2022.

“These are two already expensive markets: the combination of microeconomics and accessibility to London will make sure these places are going to be pretty popular,” says Cook. 

“We’re used to talking about commuter belts around London but now we’re beginning to see the creation of these mini belts around Oxford, Cambridge and parts of the Thames Valley, too, as buyers look further out for value or quality of life.”

Vassilis Stylianopoulos and his wife Janice Bell bought a run-down two-bed house in Fulbourn, Cambridgeshire, in 2019.

The location was ideal: Stylianopoulos had found a job at Arm, the semiconductor and software design company whose
headquarters are two miles away. Having completed a full renovation of the property with advice from the Cambridge Open Eco Homes Group, they are now looking for a new project.

“We moved from Switzerland and rented originally,” said Bell. “Cambridge is the ideal location for us: we knew there’d be many potential job opportunities for Vassilis, I could continue to work remotely and it’s easy to reach airports for flights back to Switzerland.”

“We looked at many properties within a few miles of Arm and it was Cherry Cottage that ticked all the boxes. Fulbourn has so many things to offer. It’s so close to Cambridge yet we also enjoy the benefits of living in a village.”

The house, which is now on the market with Cheffins for £1.2m, was built in 1910 on land acquired from Fulbourn Manor. The couple remodelled it to create a modern open-plan living space, four good-sized bedrooms and installed many energy-efficient features including external wall insulation and installing an air-source heat pump.

Buyers from the tech, AI [artificial intelligence] and R&D sectors have been one of the most significant drivers of the Cambridge property market, says Richard Freshwater, of estate agency Cheffins. 

“When AstraZeneca brought thousands of employees to the city for their new HQ in 2013, this completely changed our market. Cambridge went from being a sleepy city, driven mainly by the university, to a globally renowned centre for innovation.”

AstraZeneca was soon followed by the likes of Samsung, Spotify, Apple, Huawei and others. 

“With a booming population, Cambridge’s relatively small housing stock became massively in demand virtually overnight,” Freshwater continued.

Today, approximately a third of Cheffins sales are to buyers from tech, R&D and AI businesses. In general, they are looking for properties either in the centre of Cambridge or within a five-mile radius. 

Popular locations are Barton, Great Shelford, Fulbourn or Great Chesterford which all offer fast access into the science parks. Newnham continues to be Cambridge’s most sought-after location, the prime commuter belt spot. Cheffins currently have around 100 buyers looking for a property in Newnham, with one house recently marketed seeing over 11 offers. 

“With its village feel and close proximity to the city centre, Newnham has a slower pace of life compared to other areas of the city,” says Freshwater. 

“Usually, properties in the area end up going to sealed bids, and on average we would see around 50 to 60 interested parties for every house which comes to the market.”

A similar story is playing out in the arc of countryside between Oxford and Reading. While there has been a significant amount of development in the vicinity of the Oxford tech hubs, it tends to be extremely dense and many of the buyers, especially those higher up the salary chain, would prefer a more rural or village life. 

“Particularly if they’re not having to be in the office five days a week,” says Jemma Scott of The Buying Solution, Knight Frank’s buying agency. 

She recently bought near Henley for one of the leads at an Oxford Biotech company who wanted more of a country feel. “Boars Hill, five kilometres from Oxford, is an area which attracts many of the big local tech execs,” says Scott.

Once home to many of Oxford’s literary figures, it’s now finding favour with life science leaders some of whom have found plots and built large properties, lending it the moniker of the “Wentworth of south Oxfordshire”.

Charles Wellbelove, of estate agency Hamptons, picks out the Berkshire villages of Hungerford, Inkpen, Buckleberry, Kingsbury and the Mortimers as ideal for those working in the Thames Valley. 

“These areas are desirable because of their beauty and come with a range of good-looking houses, with plenty going on and those all-important good schools.”

Science or tech buyers in the prime market above £2m are noticeably younger than ever before, added Wellbelove. 

No longer in their mid 40s, they tend to be late 20s or early 30s and looking for a refurbished house which, where possible, has been adapted to meet today’s environmental concerns.

“The increased demand has certainly put pressure on local house prices in the Oxford commuter areas, however, due to more flexible working many are spreading out further into the Cotswolds and up into the M40 corridor,” adds Scott. 

“The UK Silicon valleys are certainly a driving force behind their local property markets.”