North East house price rise gains momentum
According to the latest figures, the North East property market’s Indian Summer continues apace, with house prices in the region rising by 3% in October.
The rise follows a 1.7% rise in September and wipes out a corresponding fall of 4.6% recorded in July and August. The growth adds £5070 to the value of an average home – £7711 over the course of the last eight weeks - taking the value of a typical property to £165,148. House prices rose in all 20 of the areas surveyed, with value growth ranging from 6.5% in Cramlington to 0.6% in Easington. Cramlington also recorded September’s largest rise with property values now 10.6% higher than the end of August.
Other above average rises were recorded in Tynemouth (4.3%), North Shields (4.2%) and Whitburn (4.1%).
By contrast, North East house prices fell in October 2015, albeit by a fraction of one percent.
North Shields (5.2%) overtakes Tynemouth (4.9%) as boasting the fastest over the past 12 months, with home values 4.9% higher now than they were in October 2015.With monthly growth of 4.2% North Shields is also named this month’s Best to Buy”.
Rental Market Analysis
The average North East rent rose slightly to £586 in October – a rise equivalent to £1.50 a week. Easington (£389) is this month’s cheapest place to rent in the North East out of the areas surveyed, with Tynemouth (£935) continuing to be the most expensive.
Peterlee continues to be the region’s Buy to Let capital, offering rental yields of 6.3% to investors – a rise of 0.1% from last month. Other strong performers continue to be Killingworth (5.4%) Gateshead and Newcastle (5.2%) and Seaham (4.8%).
Landlords in Whitley Bay and Darlington however can expect to see returns on their investment of just 3.5%. The rising property prices mean the average North East rental yield falls back to 4.3%– a drop of 0.1%. Killingworth’s low price growth and strong rental yield see it capture this month’s “Best to Invest” crown.
Ajay Jagota, founder and Managing Director of North-East based sales and lettings firm KIS, had this to say: “In the week of Halloween these figures are definitely a treat rather than a trick for North East property owners. You would traditionally expect to see house prices grow in sun of summer and fall back as Christmas approaches - but this year the opposite has been true in the North East rising almost 5% as we move towards the end of the year.
It’s particularly interesting that so much of that growth has been driven by the north of the Tyne with growth in places like Cramlington, Tynemouth and North Shields in and around 4%, compared to just 0.5% in Easington and Peterlee. Analysts JLL this week predicted that North East homes will fall in value in 2017 and remain ‘subdued’ until at least 2020, but with year-on-year growth of 3.7% this year that’s far from reality on the ground, for now at least.”