Member Article

Indian summer for North East property market

The North East property market has rallied after its summer slump, with house prices in the region rising by 1.7% in September.

The rise follows a 4.6% fall in prices over the course of July and August and adds £2641 to the value of an average home, taking the value of a typical property back above £160,000 to £160,078.

House prices rose in 19 out of the 20 areas surveyed, with only Blyth (-1.8%) recording a loss. Cramlington recorded the largest individual rise, with property values increasing by 3.9%.

Other above average rises were recorded in South Shields (3.1%), Washington (2.9%) Houghton-le-Spring and Jarrow (2.8%).

By contrast, North East house prices slumped by 2.8% in September 2015 with property prices recording a year-on-year rise of 0.7%.

Tynemouth pips near-neighbour Whitley Bay to record the fastest over the past 12 months, with home values 3.4% higher now than they were in September 2015.

Prices in Whitley Bay rose by 3.3% in the same period, with its below average monthly growth over the past four weeks of 0.6% seeing the town named this month’s “Best to Buy”.

Rental Market Analysis

The average North East rent fell back below £600 in September, and is currently £580pcm – a fall equivalent to £5 a week.

Blyth (£389) remains the cheapest place to rent in the North East out of the areas surveyed, with Tynemouth (£990) continuing to be the most expensive.

Peterlee continues to be the region’s Buy to Let capital, offering rental yields of 6.2% to investors – a rise of 0.1% from last month. Other strong performers continue to be Gateshead and Killingworth (5.3%) Sunderland (5%) and Newcastle (4.9%).

Landlords in Whitley Bay however, can expect to see returns on their investment of just 3.4% - a fall of 0.1% on last month - with other comparatively weak performers Darlington (3.6%) and Morpeth (3.9%).

The rising property prices and falling rents mean the average North East rental yield falls back to 4.4%– a drop of 0.2%.

Sunderland retains its “Best to Invest” crown due to continuing strong student letting demand and it’s sustained yield return of 5%, 0.6% higher than September 2015.

Property Expert Ajay Jagota is founder and Managing Director of North-East based sales and lettings firm KIS and creator of D-lighted, a deposit replacement insurance for letting agents and the private sector.

He said:

“There’s no question that the North East property market has enjoyed something of an Indian Summer, recovering steadily from the slowdown we saw over the summer.

“A lot of that growth is coming from the southern side of the Tyne, with four out of five of the best performing areas – South Shields, Jarrow, Houghton-le-Spring and Washington – being found in that part of the region.

“Overall thought, the North East remains a great place to buy a house, whether that’s as a home or as an investment. For first time buyers, you’re likely to be five years younger in the North East than you are in London when you pick up the keys to your first home.

“For investors, yields remain high, but prices remain £90,000 below average – pretty much the price of a property in Peterlee which will give you a return on your investment of 6.2%.”

This was posted in Bdaily's Members' News section by Ajay Jagota .