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Property investment in Newcastle: the facts & figures

Joined by seven bridges spanning the River Tyne, NewcastleGateshead is known as the capital of North East England and is becoming a hotspot for property investment, suiting both small and large scale investors.

Whether you’re looking for your first buy-to-let property or to expand your existing portfolio, the city offers a fantastic range of properties and a growing demand from the rental market.

Around 293,000 people now live in Newcastle and the population is increasing rapidly. A further 200,000 people live in Gateshead and the greater Tyne & Wear population has grown to over 1.7 million within a half hour drive of NewcastleGateshead.

Home to the University of Newcastle as well as Northumbria University, the city benefits from a student population of over 53,000. Further and Higher Education colleges across Newcastle and Gateshead are also attended by an added 30,000 students, including thousands at degree level from the UK and all over the world.

These large student numbers along with the 42% graduate retention rate in the North East (the highest outside of London) Newcastle’s rental market is strong for both student tenants and young professionals. The number of students remaining in the North East to work after graduating has increased by over 8% since 2011 according to the Higher Education Statistics Agency (HESA).

Demand in the Private Rented Sector (PRS) in Newcastle is growing and out-stripping supply. Not only is there large demand from students, as universities receive as many as 7 applicants per place, but the city also benefits from the high number of young professionals who choose to remain in the area post-graduation.

The Office of National Statistics (ONS) predicts that the current population of 25-44 year olds living in Newcastle will increase and display a skew towards young, highly educated, professionals.

Thanks to initiatives such as Newcastle Science Central, the One Core Strategy and the Urban Core plan, millions of pounds are being invested bringing new businesses and further investment into Newcastle and Gateshead and therefore making it an attractive place to live for people from the rest of the UK and even the rest of the world.

When looking at the return you can expect to achieve; average gross yields within Newcastle can vary from 5-6% in smaller units within the city to 7-10% in the larger Houses in Multiple Occupation (HMOs) in prime locations such as Jesmond, Sandyford, Spital Tongues and Heaton.

Newcastle upon Tyne’s private rented sector accounts for 13.2% of housing occupation, comparing favourably for investors against a national average of 12%.

Regionally, average gross rental returns in the North East stood at 7.1% in the final quarter of 2012, making it the highest in the country and well ahead of the national average of 6.1%.

Mark Walton, director of Newcastle lettings and estate agency Walton Robinson has seen growing property investment in the city and forecasts continuing growth in demand. Mark said; “There will be a growing demand from professional tenants specifically for one and two bedroom apartments in Newcastle City Centre, Newcastle-Gateshead Quays and the Ouseburn Valley as well as the traditionally popular suburbs of Jesmond, Sandyford, Heaton and Spital Tongues.

“The future of NewcastleGateshead is based upon education and economic progress and they are both bringing people and prosperity to the region. The revival of the area is well under way and Walton Robinson are excited to be a small part of the story.”

Newcastle is a hotspot for property investment from all over the world; considerable investments and development of the city have made it a desirable place to live and work for a varied demographic which is creating an increasing demand in the PRS.

The population is growing, cultural and business regeneration is ongoing and this pattern is set to continue, presenting the vibrant city as an ideal location for investment.

This was posted in Bdaily's Members' News section by Walton Robinson .