Cambridge is harnessing its global reputation as a hub of scientific excellence and continues to attract significant inward investment – giving it the best prospects for economic growth of any UK city outside London – according to Lambert Smith Hampton’s (LSH) UK Vitality Index 2017.
The report, published by the national commercial property consultancy, reveals that the highly acclaimed university city has retained its position at the top of the index as the location best placed to support economic expansion over the next 12 months.
Strong demand for residential and commercial property alike has driven considerable growth in both prices and rental levels.
Reflecting investor confidence in Cambridge, Aviva recently announced funding of 50 and 60 Station Road – the largest speculative office development ever seen in the city centre.
This forms part of Brookgate’s CB1 development which includes a public square, offices, student accommodation, retail and leisure, and a £4.5 million railway station upgrade due to be delivered in 2019. CB1 has already attracted notable tenants including Deloitte and Amazon, the latter being its first UK non-R&D or call centre office opening outside London.
The LSH UK Vitality Index assesses the UK’s 65 largest towns and cities outside London to provide a health check of their local economies and identify which are most robust, are best positioned to support growth and will provide the greatest opportunities for businesses to expand. The results are based on the analysis of 20 datasets, with each location ranked within six separate categories: most productive, fastest growing, most entrepreneurial, best educated, greenest and rising affluence.
Overall, the top 10 towns and cities in the UK Vitality Index 2017 are:
4. Brighton & Hove
7. Milton Keynes
9. St Albans
Ezra Nahome, CEO of LSH, said: “Despite last summer’s vote for Brexit, the overall health of the majority of the UK’s major towns and cities has improved. It is therefore not surprising that somewhere like Cambridge, with its first class knowledge-based economy and worldwide reputation for excellence, is leading the way when it comes to its growth prospects.”
The most notable exception to the league of successful cities is Aberdeen. With a third of its employment dependent upon the oil and gas industry, the sharp contraction in oil prices since mid 2014 has clearly impacted the local economy. One of the sharpest declines in average wages and one of the largest increases in unemployment was recorded over the past year.
As a result, Scotland’s third largest city was the biggest faller of the 65 locations – falling 20 places to 36th.
Isabel Watterson, research analyst at LSH, said: “Five of this year’s top 10 locations are in the South East, the UK’s fastest growing region outside London. Guildford and Reading edged up nearer to the top, overtaking Brighton and Oxford. Both have seen notable levels of speculative office development, while Reading has seen the strongest average house price growth of any location, boosted by the anticipated arrival of the Elizabeth Line in 2019 which will improve journeys to Central London.
“Ranked as the ‘Most Productive’ city in the six sub-indices, Milton Keynes climbed three places to seventh. Milton Keynes is forecast to see the highest growth in jobs over the next five years and saw one of the strongest increases in average wages in 2016. Reflecting the expansive confidence of the city, 2016 saw a major proposal for a 20 storey mixed-used tower which will comprise up to 250,000 sq ft of offices, 250 PRS homes and a skyline restaurant.”
She added: “In sixth place, Bristol is the highest ranked of the UK’s major regional cities. The largest city in the South West region saw the 4th highest increase in house prices, reflecting its strong reputation as a place to live and work. The electrification of the Great Western Railway line, which is currently underway, and plans to expand Bristol Airport, will further enhance the city’s offer.”
Having climbed into the top 10 for the first time last year, Manchester retained its position at eighth in the rankings. The unofficial capital of the Northern Powerhouse is one of the fastest growing city economies in the UK with a high proportion of millennials in its population. The city boasts a strong graduate retention rate and is a hot-bed for business start-ups, adding to the dynamism of the city.