This rise is the first since January and the largest since September, when prices peaked 3% above their current levels.
House prices in the region had previously fallen for seven of the last eight months and for five months on the trot leaving prices 3.8% beneath their peak.
There was a noticeable difference in performance between the North and South sides of the Tyne. Excluding Newcastle and Gateshead, properties to the north of the river recorded an average rise of 1.3%, with prices to the south recording no rise at all – despite strong growth in Sunderland and Washington.
A typical North East home was valued at £154,936 in June, £1158 more than May.
Prices rose fastest in Blyth, which saw growth of 3.6%, albeit following a fall of 3.3% the previous month.Other strong rises were recorded in Cramlington and Whitley Bay (+2.6%) Washington (+2.4%) and Sunderland (+2.1%). Prices in Whitley Bay have risen by 3.8% over the past two months.
Values fell furthest in Houghton-le-Spring, where prices fell 1.6%. Prices also fell in Easington (-1.3%) South Shields (-1.2%) and Peterlee (-1%)
South Shields prices have now fallen by 4% in just two months. As prices are remain 7.3% higher than 2011 and rental yields have risen in consecutive months, the town is this month’s Best Buy.
39% of properties in the Parliamentary Constituency of South Shields are semi-detached, with a further 30% of its 37,900 homes terraced. 68% of homes are in Council Tax Band A, compared to the national average of 25%.
36% of properties are occupied by just one person, with 30% owner occupied and just 11% privately rented, compared to 31% socially rented.
Rental Market Analysis
The average North East property currently costs £565 per calendar month to rent, unchanged from last month. Rents were also recorded as £566pcm in June 2014.
Easington (£372pcm) remains is the cheapest place to rent in the North East, while Durham City (£864pcm) is the most expensive.
Landlords and property investors can expect an identical return on their investment compared to last month, with rental yields static at 4.4%.
Gateshead remains the region’s Buy to Let Capital, with an average return of 6.6% for investors. Other strong performers for rental yield include Peterlee (5.3%) Durham City and Blyth (4.9%) and Seaham (4.8%). Yields rose by 0.3% in last month’s Best to Invest Whitburn, and are now up 0.7% in two months.
The lowest rental yields continue to be found in Tynemouth, where landlords can expect just a 3.1% return on their investment. That said, the average three bedroom property in Tynemouth can expect to find tenants within 54 days. In
Seaham it takes more than twice as long, with an identical property taking an average of 125 days to be rented out.
Rental yields have risen by 0.3% in Houghton-le-Spring over the past two months, while house prices have fallen by 5.3% since March. This sees the area named this month’s Best to Invest.
7% of properties in Houghton-le-Spring are privately rented, compared to 34.6% owner occupied and 25.3% socially rented. 50% of homes are semi-detached, with just 2% flats, apartments or maisonettes.
Ajay Jagota, Founder and Chief Executive Officer of KIS Group responded to the figures. “There’s only one word to describe North East house prices turning positive again after several sluggish months, and that’s ‘positive’. What’s even more positive is that the Office of National Statistics recently reported that house price growth is slowing across the UK. This month at least, the North East appears to be bucking the trend.
It’s striking how this month at least we seem to have our own North-South divide going on, with most of areas seeing the most growth - places like Cramlington, Blyth and Whitley Bay where prices have risen in excess of 2% – are to the north of the Tyne.
In fact, prices north of the Tyne rising nearly twice fast as average and significantly more than those south of the river, where in places like Houghton-le-Spring, Easington and South Shields, they’re even falling.
Another important thing to notice is just how static rents continue to be. The media constantly tells us that private rents are rocketing, but not only are North East rents in June 2015 exactly the same as May 2015, they’re exactly the same as May 2014!”
