On Tuesday 19th December, Michael Gove, the Housing Secretary, announced plans to deliver a further 150,000 houses in the Cambridge region, turning the city into 'Europe's science capital.' At a speech delivered at the Royal Institute of British Architects, Michael Gove laid out his vision for the area as well as announcing plans for a new development corporation which will be armed 'with the right leadership and the full range of powers necessary to marshal this huge project over the next two decades.
Here, Philip Woolner, joint Managing Partner at Cheffins, gives his view on the announcement:
“Michael Gove’s announcements for major redevelopment in Cambridge and the surrounding area have been met with trepidation. While it makes sense to capitalise on the dominance of Cambridge in the UK life sciences and wider tech sectors, it is essential that the government is careful not to kill the golden goose. Too much development could be damaging to the elements which makes this area so attractive to many. Both world-leading corporations and individuals come to Cambridge because of the lifestyle on offer; the schooling, the countryside and the beauty of the city, not only for jobs. However, now that he has given more clarity to how he intends to follow through with these ideas, at least we can look into some of the details of these proposals which, if implemented, would completely change the region.
With plans for 150,000 new homes, and acres of lab and R&D space, Mr Gove’s proposals included task groups for housing delivery and tackling some of the infrastructure issues which have plagued the city for decades. For example, the specific Water Scarcity Group which has been announced alongside the Cambridge Delivery Group will both be crucial in his plans for development and we await further detail on this in 2024. Currently there are a several large scale commercial and residential developments which are on hold due to the shortage of water in the local area, and bringing these proposals forward will require a radical solution: reservoirs situated in the Fens to the north of the city are proposed to be constructed, but to implement his plans, Gove needs to make this happen quickly.
On top of the water solution, we need to see significant improvements to our power network, and our transportation and social infrastructures. The pressure here will be on the planning teams at the various local councils affected, and the additional budget which has been apportioned to help resource planning for large-scale projects is welcomed. Locally, major developments such as the Cambridge Northern Fringe are on hold due to the logjam in the planning system, and certainly, without a major investment of resources into the planning system, Mr Gove’s proposals would be unlikely to see any significant advance for years, let alone months.
We do still need Mr Gove to clearly lay out his plans on how to address the area’s infrastructure problems but also exactly how this development can be built sympathetically, and how it will be funded. The plans for dense urban development will always be more popular than building on the green belt, however, the only two major possible brownfield sites in Cambridge, the former Anglian Water site and the former Cambridge Airport, will only deliver around 6,000 and 10,000 homes respectively, less than ten per cent of Gove’s planned 150,000 homes. Where the remainder will be built still remains unclear. And whilst "land value capture," which has previously been suggested, could help provide some funding, it is unlikely to cover the whole cost, and is bound to be highly controversial, as it looks like a development land tax by another name. Basic delivery here will be the challenge; and while it’s all very well making headline grabbing announcements, we would all like to know how are we going to pay for it, and where will it all be built.
Some proposals certainly need to be brought forward as soon as possible. It can’t be denied the need for life sciences space in the Cambridge Cluster is becoming increasingly acute. Some demand has been satisfied, however there is still a vast level of requirement within the market, with supply having been tantamount to zero for two years now. This has led to prices growing at pace, with rents now in the region of circa £65 per sq ft for the most sought-after locations. And there are a series of developments in the pipeline which are being held back by issues with planning and also infrastructure, such as the Network Rail/Brookgate scheme commercial space at Cambridge North. It is certainly important that Cambridge is able to service these requirements and remain attractive for the leading life sciences occupiers, however development of lab space is quite different to doubling the size of the city in only two decades. Cambridge is already a centre of investment, and saw Blackstone’s BioMed investing circa £850 million into delivery of lab space throughout the Cambridge Cluster in 2021. This record level of funding which is set to provide over 800,000 sq ft of space has underpinned the future expansion of the Cluster, however the announcements made by the government go quite a few steps further. And while this could potentially be a fantastic news story for corporate Cambridge, the region’s suffering services need once again to be taken into account.
There is no doubt that demand in Cambridge is huge, for both housing and for commercial property. However, these plans are being met with some cynicism in the market. Aspirational announcements are great, but Mr Gove needs to think really carefully about how this will be delivered, and how it will form part of the larger, overarching levelling up agenda for the nation. It is clear recognition of the importance of Cambridge and the surrounding region to the UK economy, and even globally, but without a wider national context and meticulous planning, there will be questions raised over its viability.”