Manchester, Liverpool, Glasgow, and Leeds will be the digital tech start-up hotspots of the future, rated by a mixture of house price affordability, volume of related jobs and the growth potential of their tech economies, according to research by online estate agent HouseSimple.com.
HouseSimple analysed the 30 regional digital tech hubs, including London, identified in the latest Tech Nation 2017 report, published by government agency Tech City UK.
Manchester came out top in the rankings, with average house prices in the city at £161,611, one of the lowest of the 30 tech hubs, more than 60,000 digital jobs and tech sector growth potential of 85%, one of the highest.
Glasgow was second, with average the house price £119,487, tech growth potential of 81%, but only a third of the digital jobs of Manchester. Leeds placed third, with slightly higher average property prices than Manchester, £171,052, and the second highest tech sector growth potential at 92%.
Liverpool was placed fourth with low house prices, a similar tech job market to Leeds but weaker growth potential than the Yorkshire rival.
Although London has established itself as one of the world’s top tech capitals, average house prices £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.
Each city was ranked from 1-30 for average house prices (lowest scored 1), number of digital tech jobs (highest scored 1) and tech sector growth potential (highest scored 1). The top city – Manchester – had the lowest total ranking points.
Office for National Statistics travel to work areas published in 2011 were used to define the geography of the cities, not administrative boundaries.
The following table lists the top 20 regional tech hubs including London in the UK, ranked by a combination of highest number of digital jobs, highest digital tech sector growth potential and most affordable average house prices:
|Location||No. of Digital Jobs*||Digital tech sector growth potential*||Average house price**||Total ranking points |
Sources: * Tech City UK/ONS, ** House price data – Land Registry
HouseSimple research revealed 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 helped super-charge property prices; up more than 43% 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.
Alex Gosling, CEO, online estate agents HouseSimple.com, comments: “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. 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.
“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, more than two thirds (68%) of total UK digital tech investment in 2016 was in regional clusters beyond London.
“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.”
Last year, digital tech investment in the UK reached almost £7bn, turnover of the UK digital tech industries was £170bn and there are now more than 1.6m digital tech jobs in the UK. The digital tech sector is booming and leading the way as Brexit is less than two years away.