Figures from regional property firm KIS show that average house values in the region rose 0.6% in September - following on from a rise of 1.1% in August. A typical property in the region is currently valued at £167,648– a month-on-month jump of £1074 in cash terms. The rise does not match the 1.6% rise recorded last September, but easily exceeds the drop of 2.8% recorded in September 2015.
Prices are also 4.7% higher than those of twelve months ago, with a typical house now valued at £7570 more in cash terms than the end of September 2016. Property values rose in 14 of the 20 areas surveyed at the end of September 2017, with property values rising fastest in North Shields (3.4%), Tynemouth (3%) Durham City (2.4%) and Whitley Bay (1.8%)
Values fell most in Blyth (-2.7%) Houghton-le-Spring (-1.7%) and South Shields (-1.4%). Prices in North Shields have performed the strongest over the past 12 months, rising by 10.1% - a leap of £17,542 in cash terms.
Other strong annual performers include Durham City (9.7%) Tynemouth (9.4%) and Killingworth (8.8%).
North East rents reduced very slightly to £603 per calendar month, a drop of £2.
Average rental yields have dipped as a result, with property investors currently seeing an average return on their investment of 4.35% compared to 4.4% last month
Investors in North East property continue to see noticeably higher returns than those who have invested in London (average yield 3.2). Blyth (£412) continues to be cheapest place to rent in the North East out of the areas surveyed, followed by Jarrow (£433). Tynemouth (£1134pcm) again the region’s most expensive in general terms.
Peterlee is yet again the region’s Buy to Let Capital, with an average return of 6.2% for investors. Other strong performers for rental yield include Gateshead (5.5%) and South Shields (5.4%) and Killingworth 5.2%.
Ajay Jagota, founder and Managing Director of KIS Group and Dlighted, said: “The North East’s rising property prices and stable rents are fascinating results on the back of a party conference season which saw the Conservatives promise to expand Help to Buy to boost the housing market and Labour promise to cap rents.
There’s no question that the original Help to Buy was fundamental to the resuscitation of the North East property market. To me it makes more sense now to combine it with reform of the tenancy deposit system, helping landlords get better protection though insurance policies and helping renters put money aside for properties of their own – for example, by allowing them to convert their deposits into Help to Buy ISAs.
For now at least, the North East property market is in a good place, and the engine room of growth appears to be the North of the Tyne, where North Shields and Whitley Bay are out-performing the rest of the region and Tynemouth is close to becoming the first area in the North East where average prices exceed £300,000.
As ever, I’m left asking if the housing policies emerging from the political establishment really are right for our region.”
