Cambridge is so hot it's cold. So disproportionate is the imbalance between limited supply and massive demand that gridlock has set in, for traffic and property alike. That's the word on the street, and it is true for the top end of the market - but plenty of morsels are available further down the food chain.

"Cambridge Science Park and other hi-tech business parks contain a number of world leaders in their respective fields. These constantly expanding research industries work in conjunction with the university, and a Cambridge address is important to these companies," says George Carey, who is a partner in Bidwells estate agents.

"There are not enough large family properties to go around. In the last two years prices have increased substantially, by 33 per cent to 50 per cent," says Mr Carey. "Large houses on the best roads are selling for pounds 400,000 to pounds 500,000. Even cash buyers from London who sold a town house and have plenty of equity are frustrated."

When a house recently came on the market, says Mr Carey, "we had 170 applicants on our books matching that property, and three buyers made offers over the guide price. But supply and demand are more evenly balanced in the lower and middle ends of the market."

His assessment is shared by Andrew Bradshaw, the senior negotiator at Pocock & Shaw, who notes: "The problem of available properties is acute, but this does not affect the first-time buyer at the lower end." But he adds that "a huge number of newcomers to the area want large Victorian houses in central Cambridge. Demand for that kind of property is colossal."

For large expensive properties, buyers and sellers alike are locked into a vicious circle. Bidwells quickly achieved the pounds 535,000 guide price and had buyers to spare for a four-storey, five-bedroom house, "but the seller wants to go one step up to a detached house with a larger garden, and they are staying put until they find one". They may stay put for some time to come.

The influx of newcomers has exacerbated the city's traffic problems, which in turn affects the property market: "Many people want to be in the city itself because transportation is a major problem, particularly when schools are in session," Mr Carey notes.

"Prices are very area-governed," cautions Mr Bradshaw. "Studios in Cambridge are available for less than pounds 40,000 to pounds 45,000, and three-bedroom 1920s semis for pounds 80,000, but prices are higher in the centre and in some especially desirable pockets."

Buyers who are prepared to redecorate can do very nicely. "What was de rigueur in the Sixties is now out of fashion," says Mr Bradshaw. "Town houses built in the Sixties now need updating, and they are located in various pockets." And their selling prices reflect their tired condition.

The Low-Down

Transport: One hour by train from Liverpool Street and King's Cross stations. Stansted and Luton airports are 30 minutes by car; fly to Amsterdam from Cambridge airport on Suckling Airways.

Patience: "People are reluctant to rent in a rising market, but if someone is buying from a distance, they should get on with their own sale," says John Carey, of Bidwells. "Rent here for six to 12 months, explore the area and be in a good position when properties become available. Be on the spot, be financially organised, and keep in regular touch with the agent, who probably has hundreds of buyers on his books."

Prudence: The further north into darkest fenland the less accessible is the city - but the lower the prices. Mr Carey recommends Ely, "a cathedral city outside the 20-minute accessibility radius, but good value, attractive, and becoming fashionable because of the pressures on Cambridge."

Ely: A detached six-bedroom house has large rooms, double garage, separate office and a pounds 275,000 price tag. "The same house 10 miles south would sell for up to pounds 400,000," says Richard Hatch, of Carter Jonas.

Council tax: Band A is pounds 455, and Band H is pounds 1,365.

Estate agents: Bidwells: 01223 841842; Carter Jonas: 01223 368771; Pocock & Shaw: 01223 322552.