Cambridge Buy-to-Let Guide

As you would expect, with such high property prices, the Cambridge rental market is also one of the most expensive in the country. Home’s Cambridge Market Rent Summary puts the average rental cost at £2,594 PCM, which is higher than most UK regions, ignoring buy-to-let in London.

This average translates to a gross rental yield of 5.74%, higher than the average UK rental yield of 5.33%.

Single rooms command an average rent of £808 PCM. However, flat rental costs jump up to £3,147 PCM. Surprisingly, houses have a cheaper average rent at £2,213 PCM.

According to the 2023 Homelet Rental Index. East of England’s annual rental growth was 8.10%, which falls short of the overall UK growth of 10.30%.

Before investing in any buy-to-let investment opportunity, you must thoroughly research the UK property market.

Here are some of the most popular locations in Cambridge for property investors and tenants.

Chesterton

Chesterton is a northern suburb that offers village aesthetics. However, it is only a half-hour walk to the city centre. The area is popular with families and is well-placed near prominent schools.

Chesterton also appeals to professionals, thanks to attractive riverside flats, excellent transport links and good eateries.

One of the more affordable postcodes in Cambridge, it was also voted one of the top suburbs in 2018 by The Times.

Average Property Prices in Chesterton

The average property price in Chesterton is £496,951.

Average Rental Yields in Chesterton

Rental properties in CB5 garner an average yield of 3.7%

If you are looking for a popular city centre area with trendy, independent shops and a thriving local scene, consider Mill Road. This place is full of quirky stores and international restaurants and boasts a vibrant atmosphere that attracts young professionals, students and families alike. Commuters can reach Kings Cross Station in less than an hour from the nearby Cambridge Station.

Average Property Prices in the Mill Road Area

Average property prices in CB1 are £524,704.

Average Rental Yields in the Mill Road Area

Average yields in this area are 3.6%.

(Average property prices were taken from Zoopla in late 2023, and rental yield estimates were calculated with figures from housesforsaletorent.co.uk in late 2023.)

Newly built properties (also known as New-Builds) are gaining traction as one of the most popular investment strategies as the supply/demand imbalance continues to dominate the UK housing market.

Almost no maintenance or repair work is needed on these developments, with the properties essentially ready for whenever tenants wish to move in. This also means a faster turnaround for landlords to start receiving rental returns, which can be a significant incentive.

In Cambridge, there are extensive planning and development schemes at work to introduce new communities and homes. For example, in July 2023, new government growth proposals were announced as part of the Local Plan to meet the anticipated housing to accommodate the predicted growth in the broader Cambridgeshire job market. These forecasts suggest an increase of around 60,000 new jobs across Greater Cambridge by 2041, meaning an additional 14,500 new homes would need to be developed.

Considering recent UK market trends, investing in new-builds such as these could lead to significant capital appreciation further down the line.

However, whilst there could be a steady stream of new-build opportunities in Cambridge, investors may find better affordability and larger tenant pools in other cities, such as Liverpool and Manchester.

Read More: Discover more about this investment trend with our recent buy-to-let guides, covering everything from new-builds in Doncaster to the latest UK hotspots!

While Cambridge is a city known worldwide, the enormous price of properties is enough to deter many investors. As a first-time buyer, you may be looking for something more affordable with better rental yields.

As such, you may want to consider looking further north. After all, the further south you go, the pricier properties will be.

Many investors could find numerous cities in the North West of England with good value properties and attractive rental yields.

For example, Liverpool has an average property price of less than £180,000 (per the HM Land Registry UK House Price Index). You can also find rental yields exceeding 7.77%, with some areas potentially offering more lucrative yields.

Even buy-to-let properties in Manchester – one of the biggest investment cities in the UK – have lower prices than Cambridge. The average property costs around £230,000 and typically boasts average rental yields exceeding 9%.

In addition, Savills predicts the North West will enjoy a capital growth of 29.4% by 2029 – the highest rate in the country.

Further Reading: Our recent Blackpool Property Investment guide delves deeper into the North West property sector, analysing the latest trends and statistics! Our team have also created a review of the Birmingham Property Investment market place for some additional inspiration.

Why not read our guide on how to invest 100k in the property sector in 2024 with our free guide.