North East property enjoys surprise spring surge

The latest figures from sales and lettings firm, KIS, have revealed that North East house prices continue to grow year-on-year – with the average home in the region now worth 2.8% more than at the end of March 2017, £4533 in cash terms.

Related topics:  Property
Warren Lewis
29th March 2018
north east

According to the report, March’s month-on-month average house price rise of 1.4% has added £2318 to the value of an average North East property, with price up 0.3% over the first three months of the year.

An average property in the region was valued at £168,000 at the end of March 2018 – compared to £165,682 at the end of February and £163,467 at the end of March 2017.

Property values in March 2018 grew in 80% of the areas surveyed, and rising by the most in Blyth (4.4%) and Killingworth (4.2%). Other above average performers include Houghton-le-Spring (3.4%) and Easington (3.1%)

Prices fell in slightly in Jarrow (0.8%), North Shields (-0.7%) Gateshead (-0.4%) and Tynemouth (-0.3%)

House prices in Killingworth and Easington have also performed strongest in percentage terms over the past 12 months, recording rises of 6.5% and 6% respectively.

Homes in Killingworth have also performed strongly in cash terms, with property values up £10242, followed by Tynemouth (£10,067) and Whitburn (£9180).

Prices are up in every one of the 20 areas surveyed, albeit by only £215 in Washington and £275 in Jarrow.

Renters in the region are slightly better off than they were four weeks ago, with average rents falling from £582 to £578 – saving tenants £488 a year.
Easington remains the cheapest place to rent in the North East, with average rents of £364 half those found in Tynemouth (£844) – this month’s most expensive.

The North East continues to offer investors average rental yields of 4.2% - with landlords in Peterlee (6%) Newcastle (5.3%) and Gateshead (5.2%) continuing to see the best returns.

Under this month’s figures, the average tenancy deposit under the six week tenancy deposit cap proposed by the government’s draft Tenant’s Fees Bill would see North East renters facing move in fees of at least £867 – rising to £1400 in Newcastle, £1230 in Durham City and £1131 in Morpeth.

Ajay Jagota, Managing Director of KIS Group, had this to say: “These figures are clearly good news for North East homeowners, but it’s important to remember that they are good news for people hoping to become North East home owners too.

Recent government figures showed UK wages rising by 2.6% a year, so with North East house prices rising at a slower rate this should mean more people able to take a first step on the property ladder.

One of the most interesting things about this month’s figures is how the North East’s property hotspots are in many cases on the peripheries of major cities rather than within the major cities themselves. For example, prices are growing at a faster rate in Killingworth than in Newcastle, and growing at a faster rate in Houghton-le-Spring than in Sunderland.

Saving money for renters is priority for policy makers, but these figures show once again that the real problem isn’t rents themselves or even the soon the be banned letting agent fees – it’s deposits, which cost the average North East tenant £867, and in places like Durham City, the best part of £1500.

One emerging trend in 2018 is property prices growing but rents staying flat or even falling. Returns for investors are holding up, but could become squeezed as the year progresses, making it more imperative that landlords and letting agents consider steps they could be taking to find tenants faster. Deposit-free renting is something which definitely fits that category.”

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