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As we reach mid-2025, Cambridge property prices are climbing steadily, with the average home now costing £507,000 - a significant 7.4% jump from last year. This historic university city continues to outperform most UK markets, driven by its thriving tech sector, world-class academic institutions, and chronic housing shortage that shows no signs of easing.
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Cambridge property prices are experiencing robust growth in 2025, with average prices up 7.4% year-over-year to £507,000. The market remains highly competitive, particularly in premium neighborhoods like Newnham where prices have surged 15%, while strong fundamentals including tech sector growth and university expansion continue to drive demand despite higher mortgage rates.
| Key Metric | Current Value | Year-over-Year Change |
|---|---|---|
| Average House Price | £507,000 | +7.4% |
| Terraced Houses | £519,000 | +8.2% |
| Detached Properties | £1,017,000 | +5.8% |
| First-Time Buyer Average | £428,000 | +7.8% |
| Properties with Mortgages | £501,000 | +7.6% |
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
What are current property prices in Cambridge as of June 2025?
Cambridge property prices have reached new heights, with the average house price hitting £507,000 in March 2025.
This represents a substantial 7.4% increase from March 2024, when the average stood at £472,000, significantly outpacing the East of England's growth rate of 6.5% over the same period. The median price sits at £395,000, with most properties selling in the £300,000–£400,000 range, making Cambridge the 24th most expensive postcode area among 105 in England and Wales.
Different property types show varying levels of price growth across the Cambridge market. Terraced houses have experienced the sharpest increases at 8.2%, bringing their average price to £519,000, while detached properties rose by 5.8% to reach an average of £1,017,000. Flats and maisonettes remain the most affordable option at £331,000, though they've shown less dynamic growth compared to houses.
First-time buyers face particularly steep prices in Cambridge, with the average price paid reaching £428,000 in March 2025, up 7.8% from £397,000 the previous year. For those purchasing with mortgages, the average price stands at £501,000, while cash buyers typically pay £521,000.
The Cambridge postcode area encompasses a wide range of prices, from the most affordable CB9 8 area at £247,000 to the most expensive CB2 7 area commanding an average of £2.6 million.
Which Cambridge neighborhoods are seeing the fastest price growth in 2025?
Newnham leads Cambridge's property price surge with an extraordinary 15% annual increase, pushing average prices to £1,291,000.
This prestigious area, known for hosting Newnham College and its proximity to the university's historic core, has become the most expensive neighborhood not just in Cambridge but across all of Cambridgeshire. The combination of limited housing stock, proximity to academic institutions, and the area's historic charm continues to drive exceptional demand from both domestic and international buyers.
Mill Road emerges as another hotspot for property price growth, benefiting from its transformation into one of Cambridge's most vibrant cultural districts. The area's diverse selection of independent shops, restaurants, and cafes has attracted young professionals and families, creating a trendy neighborhood atmosphere that commands premium prices. Similarly, Petersfield has recorded an 8% annual increase, with average properties now costing £546,196, driven by its reputation as a hip, up-and-coming area with excellent transport links.
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Other areas experiencing medium to high growth include Chesterton, Romsey, Eddington, and Grantchester. Each benefits from specific catalysts - Chesterton from improved transport infrastructure, Romsey from gentrification, Eddington from the University's North West Cambridge Development, and Grantchester from its village charm combined with city proximity.
The northern parts of Cambridge, particularly areas near the relocated Waterbeach train station and along the upgraded A14 corridor, are emerging as investment hotspots with significant potential for future appreciation.
How have Cambridge property prices changed over the past 5 years?
Cambridge's property market has shown remarkable resilience and growth over the past five years, though recent data suggests a complex picture.
Looking at inflation-adjusted figures, the average house price five years ago in 2020 stood at approximately £549,000, compared to today's nominal average of £507,000. This apparent decline in real terms masks the significant nominal price growth that occurred, particularly during the post-pandemic period when demand surged and the market experienced unprecedented activity.
The most dramatic price movements occurred between 2020 and 2022, when Cambridge, like many UK cities, experienced a property boom fueled by changing lifestyle preferences, stamp duty holidays, and ultra-low interest rates. During this period, many properties saw double-digit annual growth rates, with some areas experiencing price increases of 20% or more over just two years.
However, the market has experienced some cooling since late 2022, with rising interest rates and economic uncertainty tempering buyer enthusiasm. Some data sources indicate a slight correction, with certain datasets showing a 2% decrease in the Cambridge postcode area over the past twelve months, though this varies significantly by property type and specific location.
Despite short-term fluctuations, Cambridge's long-term trajectory remains positive, with the city's fundamental attractions - its university, tech sector, and quality of life - continuing to underpin property values.
What are the property price forecasts for Cambridge in 2026?
Property analysts project continued growth for Cambridge's housing market, with most expecting prices to rise by 3-5% annually through 2026.
The consensus among real estate experts points to Cambridge's resilient long-term growth trajectory, underpinned by its status as a global education and technology hub. Strong employment growth in the tech and biomedical sectors, combined with ongoing university expansion, creates sustained demand that outpaces new housing supply. This fundamental imbalance suggests prices will continue their upward trend despite broader economic headwinds.
Specific forecasts vary by source and methodology. Some analysts anticipate more modest growth of 2-3% annually, citing affordability constraints and potential economic slowdowns. Others project stronger performance, particularly for properties in regenerating areas or those benefiting from infrastructure improvements. The completion of major projects like the Cambridge South railway station and continued development in areas like Eddington could create localized price surges exceeding general market trends.
Several factors could influence whether Cambridge meets these projections. Interest rate movements remain crucial - while the Bank of England has begun cutting rates from their peak, mortgage costs remain elevated compared to the past decade. Political stability following the 2025 general election, resolution of planning bottlenecks, and the pace of new housing delivery will all impact whether forecasts prove accurate.
The market's trajectory will largely depend on Cambridge maintaining its competitive edge in attracting international talent and investment, particularly in the post-Brexit landscape.
Which property types are experiencing the sharpest price increases?
Terraced houses lead Cambridge's property price surge with an impressive 8.2% annual increase, reaching an average of £519,000.
This property type's strong performance reflects several market dynamics. Terraced houses offer a sweet spot for many buyers - more space than flats but more affordable than detached homes. They're particularly popular with families and professionals seeking period character combined with city-center accessibility. Many of Cambridge's Victorian and Edwardian terraces have been extensively renovated, commanding premium prices for their blend of historic charm and modern amenities.
| Property Type | Average Price | Annual Growth | Typical Buyers |
|---|---|---|---|
| Terraced Houses | £519,000 | +8.2% | Families, Young Professionals |
| Detached Houses | £1,017,000 | +5.8% | Established Families, Executives |
| Semi-Detached | £648,614 | +5.2% | Growing Families |
| Flats/Maisonettes | £331,000 | +3.1% | First-time Buyers, Investors |
| New Builds | £489,000 | +4.5% | Buy-to-let Investors, Professionals |
Detached properties, while showing more modest growth at 5.8%, have crossed the £1 million threshold on average, reflecting their status as premium family homes. These properties benefit from Cambridge's acute shortage of large family houses with gardens, particularly in desirable school catchment areas.
Flats and maisonettes, traditionally the entry point for first-time buyers, have seen the slowest growth. This reflects both affordability pressures and changing preferences post-pandemic, with many buyers prioritizing outdoor space and home offices.
New build properties command a premium at £489,000 on average, driven by their energy efficiency ratings and modern specifications that appeal to both owner-occupiers and buy-to-let investors concerned about future environmental regulations.
What are current mortgage rates affecting Cambridge buyers in June 2025?
Cambridge buyers face mortgage rates hovering around 6.8-7% for standard 30-year fixed mortgages, following the Bank of England's recent base rate cut to 4.25%.
The Bank of England's May 2025 decision to reduce the base rate from 4.5% has provided some relief to borrowers, though rates remain significantly elevated compared to the ultra-low levels seen during the past decade. For a typical Cambridge property at £507,000 with a 20% deposit, monthly payments on a 30-year mortgage now stand at approximately £2,650, compared to around £2,450 at this time last year.
First-time buyers utilizing high loan-to-value mortgages face even steeper costs, with 95% mortgages typically carrying rates 0.5-1% higher than standard products. For Cambridge's average first-time buyer property at £428,000, a 5% deposit mortgage could result in monthly payments exceeding £2,400, stretching affordability for many.
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Market expectations suggest further rate cuts throughout 2025, with analysts predicting the base rate could fall to around 3.5% by year-end. However, mortgage rates may not fall proportionally, as lenders remain cautious about economic uncertainties and maintain wider margins than historical norms.
The combination of high property prices and elevated mortgage rates creates significant affordability challenges, with Cambridge requiring 10.9 median annual salaries to purchase a median-priced home - one of the highest ratios in the UK.
How is increasing demand affecting Cambridge property values in 2025?
Demand for Cambridge housing continues to intensify, driven by a perfect storm of tech sector expansion, university growth, and lifestyle migration.
The city's population and employment growth significantly outpace new housing supply, creating persistent upward pressure on prices. Tech companies continue to establish and expand operations in the Cambridge cluster, with the sector now employing over 65,000 people and growing at 5% annually. Each high-paying tech job created generates demand for housing not just from the employee but also from service sector workers supporting the ecosystem.
University expansion adds another layer of demand, with both Cambridge University and Anglia Ruskin University increasing student numbers and research facilities. The knock-on effect extends beyond student accommodation to family homes for academics, visiting researchers, and support staff. The prestigious education system also attracts families willing to pay premium prices for properties in top school catchments.
Migration patterns have shifted post-pandemic, with Cambridge benefiting from London escapees seeking better value and quality of life while maintaining career prospects. The city's excellent transport links, including the upcoming East West Rail connection, make it increasingly viable for hybrid workers.
Supply constraints exacerbate demand pressures, with new housing delivery consistently falling short of targets. Planning restrictions, green belt protections, and infrastructure limitations mean Cambridge builds fewer than 1,000 new homes annually against estimated need for 2,000+, ensuring continued price pressure.
How do Cambridge prices compare to Oxford and Durham in 2025?
Cambridge commands higher average prices than Oxford at £507,000 versus £479,000, cementing its position as the UK's most expensive university city.
This premium reflects several factors unique to Cambridge. The city's tech sector significantly outperforms Oxford's, creating a deeper pool of high-earning buyers. Cambridge's "Silicon Fen" hosts major players like AstraZeneca, ARM, and Microsoft Research, alongside hundreds of startups, generating wealth that translates directly into housing demand.
| City | Average Price | Annual Change | Price/Earnings Ratio | Key Demand Drivers |
|---|---|---|---|---|
| Cambridge | £507,000 | +7.4% | 10.9x | Tech sector, University, Life sciences |
| Oxford | £479,000 | ~0% | 10.2x | University, Publishing, Tourism |
| Durham | £180,000-£200,000 | +2-4% | 5.8x | University, Regional center |
Oxford's market has stagnated recently, with virtually no annual growth compared to Cambridge's robust 7.4% increase. This divergence partly reflects Oxford's greater exposure to London market dynamics and its more constrained geography, hemmed in by green belt on all sides.
Durham presents a completely different proposition, with average prices at £180,000-200,000 - less than 40% of Cambridge levels. While Durham offers excellent value and quality of life, it lacks the economic dynamism and international connections that drive Cambridge's premium pricing.
The price differentials reflect earning power - Cambridge graduates and workers command the highest salaries outside London, creating a self-reinforcing cycle of high prices supported by high incomes.
What's the impact of the Bank of England rate changes on Cambridge prices?
The Bank of England's May 2025 rate cut to 4.25% provides modest relief but hasn't fundamentally altered Cambridge's expensive borrowing landscape.
While the quarter-point reduction offers some breathing room, mortgage rates remain historically high, with typical buyers facing rates around 6.8% compared to sub-2% rates common just three years ago. For a median Cambridge property, this translates to approximately £800 more in monthly payments compared to 2021, significantly impacting buyer affordability.
The rate cut's impact varies by buyer type. Cash buyers, who represent about 35% of Cambridge transactions, remain unaffected and continue competing aggressively, supporting price levels. Variable rate mortgage holders see immediate relief, with tracker mortgages dropping by 0.25%, saving around £50-75 monthly on typical Cambridge mortgages.
Market sentiment has improved following the cut, with estate agents reporting increased viewings and offer activity. However, the fundamental affordability challenge persists - even with the rate cut, buyers need household incomes exceeding £100,000 to comfortably afford the average Cambridge home.
Future rate expectations matter more than current levels for market dynamics. With markets pricing in 2-3 further cuts in 2025, some buyers are delaying purchases hoping for better rates, while others fear missing out on properties before competition intensifies when rates fall further.
How is the 2025 UK general election campaign affecting Cambridge property?
The 2025 general election campaign has introduced temporary uncertainty to Cambridge's property market, though impacts remain relatively muted compared to historical patterns.
Buyer demand has dipped slightly as purchasers adopt a "wait and see" approach, with some transactions postponing until after the election result. Estate agents report a 10-15% reduction in new buyer registrations compared to typical spring levels, though serious buyers continue pursuing properties given Cambridge's competitive market dynamics.
Political parties' housing policies focus heavily on affordability and supply, with proposals ranging from planning reform to first-time buyer support schemes. However, Cambridge's unique market driven by international demand and tech sector growth appears relatively insulated from domestic policy changes. Neither major party proposes measures likely to significantly impact Cambridge's premium property segment.
Historical analysis shows Cambridge property prices typically maintain momentum through election periods, unlike London's prime markets which show greater political sensitivity. The city's international buyer base, representing approximately 25% of purchases, remains largely unaffected by UK domestic politics.
Analysts expect any election-related slowdown to be temporary, with pent-up demand likely to surge post-election regardless of outcome. The fundamentals driving Cambridge's market - tech growth, university expansion, and supply constraints - transcend political cycles.
Will Brexit's long-term effects impact Cambridge property values through 2026?
Cambridge's post-Brexit resilience continues to support property values, with the city's international connections proving more durable than initially feared.
The tech and life sciences sectors, Cambridge's economic engines, have adapted to Brexit realities by establishing dual operations and maintaining talent pipelines through adjusted visa schemes. Major employers report continued ability to attract international talent, though at higher cost and complexity. This sustained inflow of high-earning professionals maintains housing demand despite Brexit headwinds.
University impacts appear mixed but manageable. While EU student numbers have declined, increased international recruitment from Asia and elsewhere has offset losses. Research funding has pivoted from EU sources to increased UK government support and private sector partnerships, maintaining Cambridge's research economy vitality.
Some Brexit effects manifest in specific market segments. EU national buyers have declined from 15% of purchases pre-Brexit to around 8% currently, though Asian buyers have increased proportionally. The additional stamp duty for overseas buyers, while adding cost, hasn't deterred determined international purchasers in Cambridge's premium segments.
Looking ahead to 2026, Cambridge appears well-positioned to thrive regardless of evolving UK-EU relations. The city's global rather than purely European orientation, combined with sector strengths in areas like AI and biotech that transcend borders, suggests continued property market strength.
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What role do tech companies and startups play in driving Cambridge prices up?
Cambridge's tech sector directly drives property prices through high-paying jobs, with average tech salaries exceeding £75,000 compared to the city median of £40,000.
The "Silicon Fen" phenomenon continues accelerating, with over 5,000 tech companies now operating in the Cambridge cluster. Major players like Apple, Amazon, Microsoft, and Google have expanded their presence significantly, while homegrown unicorns like Arm and Darktrace create wealth through IPOs and acquisitions. Each senior tech hire typically supports 2-3 additional service jobs, multiplying housing demand.
Several factors explain tech's outsized impact on property prices:
- Stock options and bonuses enable tech workers to outbid traditional buyers
- International recruits often receive generous relocation packages including housing allowances
- Tech companies themselves lease or purchase residential properties for employee accommodation
- Venture capital influx creates paper millionaires who invest in property
- Flexible working arrangements allow tech workers to afford larger homes as combined office/living spaces
The concentration of tech activity in specific areas like the Science Park and emerging innovation districts creates hyperlocal price pressures. Properties within cycling distance of major tech employers command 15-20% premiums over equivalent homes elsewhere in Cambridge.
This tech-driven demand shows no signs of slowing, with Cambridge attracting record venture capital investment and new company formations continuing despite broader economic uncertainties.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
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We made this infographic to show you how property prices in the UK compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It's an easy way to spot where you might get the best value for your money. We hope you like it.
Based on our comprehensive analysis of Cambridge's property market as of June 2025, the answer is clear: Yes, property prices in Cambridge are definitely going up. With a robust 7.4% annual increase bringing average prices to £507,000, Cambridge continues to outperform most UK markets. The combination of tech sector growth, university expansion, limited housing supply, and improving mortgage conditions suggests this upward trajectory will continue through 2026 and beyond.
While challenges exist - including affordability constraints and economic uncertainties - Cambridge's fundamental strengths as a global innovation hub ensure sustained demand that significantly exceeds supply. For investors and homebuyers willing to navigate the competitive market, Cambridge property remains a sound long-term investment despite the premium prices.
Sources
- Office for National Statistics - Cambridge House Prices
- PlumPlot - Cambridge House Price Analysis
- Bank of England - May 2025 Monetary Policy Summary
- Rightmove - Cambridge Property Prices
- Centrick Invest - Cambridge Property Market Trends 2025
- Cambridge Removals - Why House Prices Are Rising
- Savills - General Election Impact on Housing Market
- MoneySavingExpert - Bank Rate Cut Analysis
- Bush & Co - Cambridge House Price Expectations
- InvestRopa - Cambridge Real Estate Market Analysis