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Peer2Peer Finance News | September 20, 2017

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High property prices threaten London’s tech hub position

High property prices threaten London’s tech hub position
Marc Shoffman

FORGET London, the digital hubs of the future will be in Manchester and beyond, research claims.

Online estate agent HouseSimple carried out analysis of property prices, digital technology jobs and the growth potential of local digital economies. It identified Manchester, Glasgow, Leeds and Liverpool as future hotspots.

HouseSimple ranked the 30 regional digital tech hubs identified in the latest Tech Nation 2017 report by average house price, number of digital jobs and digital tech sector growth potential.

Read more: London scores poorly as start-up hub

Manchester came top, with average house prices of just £161,611, but more than 60,000 digital jobs and tech sector growth potential of 85 per cent.

Glasgow was a close second, with average house prices coming in at £119,487, and tech sector growth potential of 81 per cent.

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, at 92 per cent.

Although London has established itself as one of the world’s top tech capitals, average house prices of £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 capital 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, the agent warns.

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“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,” Alex Gosling, chief executive of HouseSimple, said.

“The digital economy is expanding rapidly, creating new jobs and opportunities in cities across the UK.

“London has been the beacon for the digital tech sector in the UK, but the flame is starting to burn a little less brightly, as the high cost of living and unaffordable property prices has seen an exodus of tech workers and tech businesses.

“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.”

Location
No. of Digital Jobs*
Digital tech sector growth potential*
Average house price**
Total ranking points 
Manchester
62,653
85%
£161,611
22
Glasgow
25,992
81%
£119,487
24
Leeds
23,734
92%
£171,052
27
Liverpool
23,407
79%
£123,117
32
Nottingham
19,741
81%
£132,318
33
Edinburgh
25,109
92%
£229,357
33
Bristol
35,924
88%
£263,759
36
Cambridge
30,219
95%
£439,144
36
Sunderland
5,742
81%
£108,072
40
Dundee
3,571
86%
£117,082
41
Middlesbrough
6,970
79%
£110,309
42
Birmingham
36,802
67%
£168,651
43
Newcastle
20,290
76%
£154,553
45
Bournemouth
15,763
91%
£238,377
46
Sheffield
18,961
70%
£150,530
48
Reading
45,269
77%
£306,750
49
Brighton
12,614
92%
£354,430
49
Plymouth
6,404
84%
£169,471
49
London
300,169
78%
£481,345
50
Hull
6,914
70%
£104,155
50

Sources: * Tech City UK/ONS, ** House price data – Land Registry