11 of the 20 areas surveyed by KIS saw prices fall over the past four weeks, with particularly sharp decreases in Blyth (-3.6%) and Houghton-le-Spring (-3.1%). Blyth’s fall follows a strong start to the year, with prices having risen by 4.4% in January and February.
Regional property prices have now fallen for five of the last six months – rising only in January – are now 3.3% below their September peak.
Modest rises were recorded in many of the areas surveyed, in particular Tynemouth, which recorded a rise of 1.4%, over four-and-a-half times faster than the regional average.
A typical North East property costs £578 a month to rent - £18 more than February.
Ajay Jagota, founder and Chief Executive Officer of KIS Group had this to say:"The North East property market continues to hibernate. Property prices in our region are down 0.3% over the past four weeks, and have now fallen in five of the last six months.
That said, it’s fairer to say that the market is flat rather than falling - once you strip out outliers like Blyth, down 3.6%, and Houghton-le-Spring, down 3.1%, it looks like another month of no change. Last month an average house would have cost you £154,000, this month it’ll cost you £154,000.
Houses are selling, but that hasn’t yet been reflected in prices, with only places like Tynemouth, where prices are up 1.4% for the second month in a row, or North Shields, where they’re up almost 3% this year already, showing much momentum.
Dig below the surface and the figures for a lot of individual areas look a bit like a children’s rollercoaster, a gentle rise followed by a gentle fall followed by a gentle rise and so on. Places like Washington, Whitley Bay, Sunderland and Newcastle are typical, rising or falling by pretty much the same amount they fell or rose by the month before, with rents and rental yields becalmed, temporarily at least.
Nowhere is this more pronounced than in Blyth, which began the year significantly out-performing the rest of the North East by rising 4.4% in January and February, only to see those gains wiped out this month.
Blyth does strikingly show the value of our highly focused analysis though. Most statistics would probably lump it in with Cramlington next door, but ours shows you that landlords can expect a 20% better return on their investment, and a yield rising six times faster.
My hope is that the new Help to Buy ISA announced in last week’s budget will be the shot in the arm the North East housing market need – there’s no question it will help first time buyers overcome obstacles to home ownership. I can’t overstate the impact of Help to Buy getting the housing market moving again, but falling mortgage availability means Help to Buy now needs help.
If that doesn’t work, it looks like we might have to wait until after the General Election to see real movement back in the market.”
