Technical hubs that create employment are also having an effect on house prices with locations such as Cambridge, Reading and Oxford seeing values rise substantially since 2012.
London is known for having a thriving tech sector but other cities in the UK are also benefitting with new research also suggesting that Manchester, Glasgow, Leeds and Liverpool are set to be digital hotspots too.
The research looked at 30 digital tech hubs, including London, identified in the latest Tech Nation 2017 report and then ranked each city by average house price, number of digital jobs and digital tech sector growth potential.
The analysis from online estate agents HouseSimple research found that the established tech hubs of Cambridge, Reading and Oxford, with more than 100,000 digital jobs between them, have seen some of the highest property price increases over the past five years of anywhere in the UK.
Their booming tech economies have resulted in a 43% rise in property prices in Oxford and Cambridge, and almost 54% in Reading since 2012. That compares with a 31% average price increase for the UK over the same period.
The research also found that two of the emerging digital tech hubs Ipswich and Exeter, have seen the largest average property price rises over the past 12 months, of any of the 30 regional tech hubs, up 8.9% in Ipswich and 8.7% in Exeter, almost double the UK average.
Looking ahead at cities with the highest digital tech growth potential and most affordable property prices, Manchester came out on top with an average house price of £161,611, more than 60,000 digital jobs and tech sector growth potential of 85%. The report suggests that Manchester is well placed to prosper when Britain leaves the European Union.
Glasgow was next with average house prices just £119,487, and tech sector growth potential of 81%. However, the city currently has a third of the digital jobs in Manchester. Leeds placed third, with slightly higher average property prices than Manchester at £171,052, but the second highest tech sector growth potential of any of the regional tech hubs at 92%.
Although London has established itself as one of the world’s top tech capitals, average house prices at £481,345 are three times higher than in Manchester and four times higher than in Glasgow. As a result, London only ranks 19th, with the report suggesting that it is vulnerable to a mass exodus of digital talent to the thriving regional tech hubs where business costs are cheaper and housing is considerably more affordable.
‘Britain was described by Chancellor Philip Hammond as an innovation powerhouse and the digital tech sector is predicted to lead the way when we leave the EU. The digital economy is expanding rapidly, creating new jobs and opportunities in cities across the UK,’ said Alex Gosling, HouseSimple chief executive officer.
He pointed out that while London has been the beacon for the digital tech sector in the UK, it could be affected by the high cost of living and unaffordable property prices has seen an exodus of tech workers and tech businesses.
‘With tech start-ups able to tap into a growing pool of highly skilled workers outside the capital, the regional tech hubs are thriving. In fact, according to the latest Tech Nation report 68% of total UK digital tech investment in 2016 was in regional clusters beyond London,’ Gosling explained.
‘Regional tech hubs are set to boom over the next few years, as the local digital economies become more established. And the regions best placed to take advantage of the investment being pumped into the digital tech sector will be the ones that can offer not just the best job opportunities but also the best quality of life,’ he added.
