Research article

Shifting demand

A changing economic base and the drive for Levelling Up is creating new opportunities across the city

The past 15 years has seen significant changes for Cardiff, but the next 15 are likely to see even more dramatic shifts. The Covid-19 pandemic has led to changes in working patterns, with over half of business reporting they intend homeworking to be part of a permanent business model.

The types of home in demand have changed as a result. As people expect to be spending more times in their home for work, there has been increased demand for larger homes. This is ref lected in values, with houses in Cardiff seeing value growth of 11.8% over the past year, compared to flats that have only risen at 5.8%.

Over the past three years, 52% of new homes delivered in Cardiff have been 3 or 4 bed houses, which should suit these home workers. Looking forward, Cardiff will need to continue to provide suitable homes that appeal to home workers, alongside transport infrastructure appropriate for those who will continue to commute regularly.

The end of Help-to-Buy next year will pose a further challenge. The scheme has supported over half (55%) of new build sales in the city over the past five years by our estimate. In its wake, other tenures will rise to help fill the gap.

We expect a greater level of delivery of Affordable homes and Build to Rent products to help plug this demand for those who cannot afford to buy, with 2,700 BtR units currently in the planning and development pipeline.

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Cardiff has had a reputation for affordability, but recently this has tightened considerably. The house price to income ratio in the city has shot up from 6.7 in 2019 to 8.2 in 2021. This is far higher than the rest of Wales, and rapidly closing in on the affordability ratio in Bristol.

If this ratio continues to rise, Cardiff will lose one of its key advantages. If the city fails to control these affordability issues, it will struggle to attract and retain the occupiers and employees it needs to sustain its growth. However, delivering a continuing supply of new homes will help to mitigate this risk.


In the longer term, Levelling Up remains a high priority for the government, although the exact details may evolve with the current fluid political landscape. This has the potential to bring significant investment to the city.

Cardiff is currently in the highest levelling up priority category, with central government committing £500m of levelling up funding to the Cardiff Capital Region through a City and Growth deal. This includes £25m of innovation funding to support CSconnected, a centre of compound semiconductor technology, and £22m for to support Cardiff’s growing media sector. These schemes are expected to boost high value employment in the city, driving demand for both workspace and new homes.


Cardiff is home to one of the fastest-growing digital clusters in the UK, and the city is seeing the emergence of a new level of sustainable and flexible office space, such as the newly refurbished Coal House, which will provide an inspiring working environment with the credentials and flexibility to accommodate occupiers seeking best-in-class flexible office space in the city centre.

Cardiff has the highest positive margin between new start-up firms and failures in the UK. In fact, in 2021 Cardiff had 72.14% higher business openings than closures. To accommodate these Start-Ups, Tramshed provides a good opportunity. Tramshed Tech’s original HQ in Grangetown, consists of 25,000 sq ft of co-working and office space - located in a Grade II-listed building that was once the old tram depot. Recently, Tramshed and Hodge Bank have partnered to power a new tech and innovation hub in One Central Square in the heart of the city’s business district.

Universities also play an important role in business start-up support. They not only finance incubators to support start-ups but contribute to their survival and growth. A new building on Cardiff University’s £300m innovation campus sbarc|spark aims to encourage out-of-the-ordinary creative thinking and the exploration of new possibilities. The centre will bring together 13 social science research groups collectively known as SPARK – the world’s first Social Science Research Park – alongside Cardiff Innovations@sbarc – a hub for innovation, start-ups and spinouts. It features collaborative working spaces, a visualisation centre, auditorium and fabrication lab. This hub provides the seedbed in which Wales can nurture and grow tomorrow’s big idea.


The city can work to further boost its economy by widening its travel to work area that is comparatively small. Cardiff has approximately 295,000 households within one-hour journey of public transport to the city centre. This is behind peer cities, with Bristol having 354,000 households within an hour of the centre, and Manchester and Birmingham at 770,000 and 785,000 households respectively.

This smaller travel to work area limits Cardiff’s potential for growth. But by developing public transport infrastructure, Cardiff will be able to boost its effective workday population. The ambitious South Wales Metro will help achieve this. This multi-phase project includes electrification of 170km of track and two new stations. Work has already begun and is expected to complete in 2024. A new Cardiff Bus interchange is expected to open next year, and there are plans to introduce 4,000 cycle parking spaces across the city to support more sustainable travel.

These infrastructure improvements will help Cardiff expand its effective population, supporting its growth. This greater connectivity will also benefit nearby towns such as Merthyr Tydfil and Aberdare, and will likely boost demand for homes in these areas.

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