House prices in the North East fall further in February

House prices in the North East fall further in February

According to a new report, North East house prices have continued their slow start to 2016 - falling by a further 0.4% in February.

The data revealed that prices have now slipped by 3.5% over the first eight weeks of the year – wiping £5313 from the value of an average home in the region.

A typical North East home cost £158,184 at the end of February - £571 less than January.  Prices are nonetheless 8.5% and £13,312 higher than those recorded in the same period last year.

Several areas bucked the regional trend and saw prices rise – including Cramlington and Durham City (0.9%) , Washington (0.8%) and Peterlee and Gateshead (0.7%).

Blyth (-3%) saw the biggest drop, followed by South Shields (-1.6%) and Newcastle and Sunderland (-1.4%).

Whitley Bay has seen the biggest price rise over the past 12 months, recording a year-on-year increase in value of £14,003.

Prices in Blyth have dropped by 7.4% in the first two months of 2016 – making it this month’s Best Place to Buy.

43% of properties in Blyth are semi-detached (4% above the regional average), with a further 28% terraced (slightly below the regional average of 30%). 48% of properties have at least three bedrooms.

59% of homes are owner-occupied out-right, or with a mortgage – slightly below the regional average of 61%. 18% of homes are rented from registered social landlords or local authorities, 4% below the regional average. 12% of properties are rented privately, marginally below the regional average of 13%.


Rental Market Analysis

North East rents rose by £1 a week in February, rising from an average of £551 per calendar month four weeks ago to £555 today. Prices are £5 a month lower than in February 2015.

Blyth (£394) has replaced Easington (£425pcm) as the cheapest place to rent in the North East out of the areas surveyed, while Durham City (£818pcm) remains the most expensive.

Gateshead remains the region’s Buy to Let Capital, with an average return of 6.2% for investors. Other strong performers for rental yield include Peterlee (5.14%) and Newcastle and Seaham (4.8%)

Near flat house prices left rental yields unchanged at 4.2%.

The lowest rental yields continue to be found in Tynemouth where landlords can expect a 3.1% return on their investment.

Newcastle and Peterlee both saw investment returns rise by 0.3%, while yield in Morpeth rose 0.2% to leave investor returns 0.5% up over the first two months of the result – leading to the town being named this month’s Best to Invest.

28% of properties in the town are detached compared to a regional average of 16%. 19% of properties are occupied by two adults and one or two children, 17% by adults aged 16-64 with no children and 15% by single occupiers. 39% of properties have at least 3 bedrooms.
 
75% of properties are owner occupied – well above the regional average. Just 14% are socially rented, compared to 22% regionally.

Ajay Jagota, founder and Managing Director of local sales and lettings firm KIS Group, responded to the figures: “Blyth and Cramlington might be little more than four miles apart but the distance between house prices has changed by nearly 4% in just four weeks. It’s discoveries like that which show the real value of highly focussed geographical analysis like ours.

As estate agents you expect the first couple of months of the year to be amongst the quietest, and there are plenty of reasons why the regional property market has got off to a slow start to 2016 – not least the economic uncertainty in the air, which is likely to make buyers adopt a more cautious ‘wait and see’ stance.

As I was fortunate enough to get the opportunity to explain to BBC Breakfast this week, I am more and more erring towards voting towards a so-called Brexit in the EU Referendum, but that’s not to say that in the short term a significant amount of people are putting off buying a property until after June’s vote.

We’re still seeing a significantly more positive outlook for North East property than this time last year – only this week we saw the Housing and Communities Association report that housing completions in the region rose 25% last year, the highest percentage in the UK outside of London.”

Join our mailing list:


Comments

  1. Agent_PeeBeeAgent_PeeBee03 March 2016 14:56:00

    Please advise as to the details of this "new report". Where can I find it? Who is the author? Where does the dataset used to provide the statistics come from? What validation process has the dataset and the 'report' been subjected to? I look forward to the response.

    Reply to this comment

Leave a comment



Our Next Event

Complex Lending Roadshow March 2017

Complex Lending Roadshow March 2017

Bolton - 14/03/2017

Barnsley - 15/03/2017

Solihull - 16/03/2017

Watford - 17/03/2017

Register now

Latest Comments

Matthew Hollywood
Matthew Hollywood 07 Feb 2017

Matthew Hollywood - Director Mishon Mackay Land & New Homes - Brighton The shortage of New Homes is in part effected by the lack of land sales. Land sales are held back because there is a disparity between...

view article
CommercialTrust
CommercialTrust 30 Jan 2017

Hi Graham, Would be interesting to see the above figure calculated against an investment via a Lt Company /SPV structure and if the investor found themselves pushed in to the higher tax bracket. Mortgage...

view article
Tony Gimple
Tony Gimple 16 Jan 2017

HMOs do make great commercial sense, but do the area research first!

view article
OJoyce
OJoyce 30 Dec 2016

We can only hope this will bring the results we all want and strive for.

view article
Reality
Reality 21 Dec 2016

The changes to land tax were a shock to many when it was first announced by the Chancellor in 2015?s Autumn Statement. However, once the changes came into place and the full details were digested, it?s...

view article
akbar ali dayala
akbar ali dayala 20 Dec 2016

I am a landlord and director of an online letting agents at the moment we charge tenants minimal fees and landlord also meaning we can get best deals for tenants all around if the ban comes in it...

view article
milessgabriel
milessgabriel 05 Dec 2016

Useful article

view article
Spencer Fortag
Spencer Fortag 30 Nov 2016

I am glad that someone listened to me!

view article
Tony Gimple
Tony Gimple 27 Nov 2016

It's not just the lack of estate agency advice that's costing landlords money; most are getting seriously bad advice from their accountants resulting in tax bills far higher than they need to be. Likewise,...

view article
Sally Walmsley
Sally Walmsley 18 Nov 2016

The RLA stands by its sell-off statistics. While we welcome the feedback from Mr Jagota and are delighted to hear how well things are going for landlords in the north east, we would like to make it clear...

view article
Sheryl87
Sheryl87 18 Nov 2016

The high employment levels and the vibrant economy has led to ever-increasing demand for rental properties, especially from professionals relocations from other cities. This has led to more experts teaming...

view article
Sheryl87
Sheryl87 18 Nov 2016

Renting out your house can be risky business. It's good to think about residential landlords insurance. Standard cover includes buildings cover and cover for loss of rent following damage to a property...

view article

Related stories

More articles from Property