What’s Happening To Property Prices In Cambridgeshire
And What Does 2026 Hold?
Coversure is known as the home of property insurance, especially when it comes to specialist lines like unoccupied property insurance and commercial property insurance. Over the last few months, we’ve had hundreds of conversations with Cambridgeshire property owners. Most reported that the market remains strong and prices are rising. The latest Office for National Statistics (ONS) figures support this view, showing property prices in Peterborough rose by 1.7% in the year to August and are 5.6% higher in Cambridgeshire as a whole. For landlords, the picture is also positive. The ONS revealed that average rents in Cambridge rose by 7.1% in the year to June. The momentum may be slowing, though. Cost pressures, legislative changes, increases in housing stock and the government’s First Time Buyers scheme, which allows buyers to purchase homes for 30-50% less than the market value, have all had an impact. One of our landlord insurance clients told us recently:
‘In the last 10 years or so, landlords in Cambridgeshire have had it good. The market’s been rising and there has been plenty of demand, but I can see things slowing down over the next couple of years. That said, for commercial landlords in cities like Peterborough and Ely, there are great new opportunities on offer.’
So, what does the future hold for property prices in Cambridgeshire, and what will affect the outcome? Coversure Peterborough’s founder and property insurance expert, Andy Price Dip. CII shares his thoughts and finds plenty of room for optimism for those who plan ahead. We hope this blog will prove useful, but if you’d like some personalised advice or a property insurance quote, please call us on 01733 915 050 or request a callback.
The Property Market In Cambridgeshire 2025
The Cambridgeshire property market isn’t a single market, but two. There’s Cambridge (and increasingly Ely), and there’s everywhere else. Recent datasets show Cambridgeshire’s average house price is £361k, while Cambridge is £468k. The average rent for a two-bedroom flat in Cambridge is around £1,618 per month, versus £1,300 for the county. Demand for commercial property is also strong. Around Cambridge, it’s mainly for offices and science/hi-tech development sites, whereas in Peterborough, there is a massive demand for commercial property such as logistics and manufacturing hubs. Developments like the Cambridge-Oxford rail link and soaring demand for logistics services should see the county’s largest cities’ commercial property sector continue to grow. We’ve seen a surge in the number of requests for commercial property insurance.
Opportunity areas: Cambridge city and the “Silicon Fen” suburbs
Demand from tech workers, researchers, and graduate talent continues to underpin both prices and rents in and around Cambridge. The city’s tight housing stock, plus the presence of high-paid roles in life sciences and software, keeps competition intense for well-specified housing aimed at professionals. This is especially true for 1–3 bedroom flats and townhouses within easy commuting distance of major tech clusters.
For residential landlords to make the most of this opportunity, they should prioritise professional lets with good Energy Performance Certificate (EPC) ratings, fast broadband, modern kitchens and bathrooms, and price competitively for longer tenancies.
For commercial landlords, there are two ways to go. Either provide office locations – flexible terms and hot-desking are in great demand, especially near tech clusters around the University’s facilities. The other is to look to convert offices to residential accommodation. The capital expenditure can be large, but so can the returns. One of my landlord insurance clients is doing this. He told me:
‘It was a huge step. We’ve a property in Huntingdon Road and occupancy rates were falling, so we took the plunge. The Council were supportive, and while it’s not been easy, we’re confident of excellent long-term returns.’
Rail and road improvements to towns like King’s Lynn and Huntingdon will expand Cambridge’s sphere of influence for all. Towns as far away as Downham Market have seen prices rise by 17% in the last five years, and others will see this happen. Where transport projects have been confirmed, expect buyer appetite to persist ahead of supply responses.
Smaller towns such as Waterbeach and the villages around Ely will see further growth as families look for more space. Similarly, pretty villages around Peterborough, including Castor, Wansford and Ufford, will see ongoing demand.
Cooling areas in a property hotspot
Cambridgeshire’s a big place, and some areas are showing signs of slowing. Data show that flats in some parts of Cambridge and surrounding towns have slightly underperformed in 2025, while houses have held up better. Reasons include supply of new-build flats, changes in tenant preferences (more desire for space), and affordability constraints in certain price bands.
Landlords with a poor EPC or management issues, consider targeted investment such as EP improvements and communal works, or repositioning them to longer-term let to secure income rather than attempting uplift via price alone.
Tax concerns
Some higher-value areas saw a modest price drop when buyer sensitivity rose after the recent tax adjustments. These markets are more volatile because buyers are more rate-sensitive and often rely on mortgage finance; when mortgage availability tightens or stamp duty tweaks occur, activity and pricing can soften. While interest rates are coming down, inflation remains stubbornly high, which could deter cuts, and the Budget will see more tax rises on the better off. High-end properties may prove harder to sell in the short term.
What are the main market drivers?
Good economic fundamentals and the employment mix. Cambridge’s knowledge economy (life sciences, AI, and research institutes) has created a number of highly paid roles and attracted investment to the region. This has pushed demand for quality housing and supports rents. Where new jobs are created (or announced), expect local housing demand to increase ahead of supply. The county’s logistics sector has been significant in this area. Peterborough’s well-known as a logistics and haulage centre, and in July, a new hub was proposed in Ely, which would create at least 1,200 new jobs. The MD of Spencer Logistics, one of our larger logistics insurance clients, recently told me that Peterborough was set to rival Nottingham as one of the UK’s largest logistics and haulage centres. Its combination of transport links and available development space makes it the perfect location to do business.
Supply constraints and new-build mix
Planning remains a problem, not to mention a political hot potato. The government plans to simplify planning applications through various measures, including streamlining minor developments, introducing a “medium” site category, delegating more approvals, reducing validation requirements, and standardising local plans with digital technology and shorter timeframes. Other reforms involve creating new Permitted Development Rights (PDRs), making the planning system more digital-friendly, and speeding up the determination of applications.
As it stands, these constraints, plus guidance around what can and cannot be built, have helped underpin rental and property prices. Speeding up the planning process will mean more will be built, but the pent-up demand remains high; it will take some time for supply-side changes to have an impact.
Mortgage rate moves and buyer sentiment
After a period of elevated mortgage rates, market sensitivity to rate news affects buyer demand. Interest rate cuts or improved mortgage pricing can stimulate activity; conversely, uncertainty dampens it. This is reflected in the mixed national figures and the regional variations you see in Cambridgeshire listings. While prices/rents are still rising, recent decisions by the Bank of England to keep interest rates at 4% has affected the market. Many expect rates to fall in 2026, and so many people will wait until then before taking out a new mortgage.
Policy and regulation
The Renters’ Rights Bill has received Royal Assent and is now the Renters’ Rights Act 2025. However, most of its provisions, such as the abolition of Section 21 “no-fault” evictions, will not be implemented until 2026. The government will announce the specific implementation timelines for the various changes through secondary legislation. The Act will have a significant impact on buy-to-let landlords as it affects eviction processes, compliance costs, and holding strategies. The Financial Times expects it to see more landlords leaving the market, prompting an increase in the amount of property for sale. This could be good news for buyers, thanks to lower prices and for landlords who stick with it, as the total amount of available rental property will have fallen.
What does this mean for Cambridgeshire’s landlords?
We asked our landlord insurance clients what they are planning to do to respond to the market changes, and their top actions are:
- Re-run the numbers as cash flow is king – the landscape for residential and commercial landlords has changed. Volatile interest rates, greater legislative burdens, and rising costs mean it’s important to plan for scenarios such as rental voids, interest-only vs repayment mortgages, and likely legislative cost increases from licensing, minimum standards, and EPC works.
- Prioritise yield-protecting capital expenditure – now’s the time to undertake small-to-medium-sized works that reduce void time. Updating kitchens, bathroom refreshes, updating double glazing, or reducing running costs to meet EPC standards often pay back faster than speculative repositioning. Professional-grade broadband can be a quick win as tech-savvy renters value it.
- Review tenant mix and tenancy lengths – where demand is driven by professionals, offer slightly higher-spec units with stable, longer tenancies. For weaker markets, consider HMO licensing where appropriate, but only after checking local HMO demand and compliance costs. Some of our landlords have doubts about the whole HMO sector. Bath has announced it may ban them, and local authorities are increasingly implementing stricter regulations and planning controls to manage their proliferation in specific areas.
- Consider debt opportunities and refinancing windows – if mortgage rates are moving lower or new competitive mortgage products appear, refinancing to improve cash flow can make sense — but only after factoring in fees and potential early repayment charges.
What does this mean for commercial landlords?
Commercial property insurance is a speciality of ours, and it’s an area of huge opportunity and change. In Cambridgeshire, it often entails tailoring the offering to the specific needs of the business, so our commercial landlord clients are:
- Being flexible with office and lab space – Cambridge’s tech and life sciences growth makes demand for modern labs, incubator space, and flexible offices attractive. These types of property take extra capital expenditure and a deep understanding of things like mechanical ventilation, floor loading, zoning, and longer lease negotiations.
- Retail and high-street exposures vary by town – high streets in commuter towns face mixed fortunes: those with strong local services and good connections hold up, while isolated retail suffers. Consider diversification of ground-floor units to services, medical, beauty or fitness to improve resilience. Cambridgeshire is faring better than most in this area. According to the ONS, Peterborough’s city centre shop vacancy rate was about 11-12%, significantly under the national average of 14%. An August 2025 survey reported the rate even lower, at 10.3%, the 10th fewest empty units in the UK among the cities studied.
- Lease structures and tenant covenant checks – given variability in sectors, stress-test tenant covenants in tech and hospitality, and build in break clauses and rent review timing that protect your income during downturns.
The Cambridgeshire property market: A bright future?
‘2026? Change, challenge, and opportunity’ is how one of our commercial landlord insurance clients summed up the next 12 months. From regulatory change, a challenging marketplace, and opportunities from sectors such as life sciences and logistics, a lot is going to happen in the Cambridgeshire property market between now and the end of 2026. In 2025, we’ve seen a few smaller residential landlords cancel their policies as they’ve sold up, but that’s been more than balanced by requests for landlord insurance quotes from professional landlords and commercial property owners.
One thing I think we’ll see in 2026 is Cambridgeshire property market will become less Cambridge and everywhere else. Growth in other centres like Ely, Peterborough, and Huntingdon will see a balancing up and greater overall prosperity. As we have seen elsewhere, in London, for example, as prices grow so people fan out in search of more affordable properties that are still within easy reach of the city.
As a business that has seen huge growth in demand for property insurance over the last few years, we’re gearing up for even greater things next year. While Cambridgeshire remains a county of contrasts and a cautious approach to pricing combined with a flexible approach to tenants is likely to prove successful. Where you can match the needs of the tech and professional tenant base — good transport, quality accommodation, reliable services — you’ll find markets that continue to reward well-run assets.
Andy
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If you’d like some personalised advice on getting residential landlord or commercial landlord insurance, or a landlord insurance quote, please call us on 01733 915 050 or request a callback.
