North East house prices have risen by 11.1% in the last year – but are all-but unchanged this month

Landlord Expert
By Landlord Expert May 7, 2015 13:49

North East house prices have risen by 11.1% in the last year – but are all-but unchanged this month. Prices have fallen by 1% over the first four months of the year, and have slipped by a further £49 over the past 4 weeks.Rents in the region have fallen by 2.2% over the past 12 months.Blyth has seen prices rise fastest over the past 4 weeks, up 3%, followed by South Shields (2.4%)South Shields homes worth £11,000 more than last year, in Blyth that figure is just £2.

KIS Housing NOW – Housing North of Watford - pulls together the most authoritative and up-to-the-minute data and the expert market analysis of the KIS Intelligence Service to give you an indispensible guide to the state of the North East property market.

The report in full - including area-by-area statistics - is attached.

Property Price Analysis

North East house prices are up 11.1% since this time last year – but growth is continuing to flatline from month-to-month.

This data comes despite information from the Land Registry Office appearing to show that North East property prices fell 2.9% in the year to March, the only region in the UK were prices fell.

An average house in the region cost £137,411 in April 2014. The figure is now £154,450, although this is £49 down since 4 weeks ago – a marginal fall of 0.04%.

The individual area seeing the biggest rise year-on-year is South Shields, where prices are £10,598 higher than this time last year. Tyneside sibling North Shields has been hot on its heels, with a rise of £10,179 in the same period.

North East property hotspots, April 2014-April 2015:

1.       South Shields – up £10,598

2.       North Shields – up £10,179

3.       Morpeth – up £9988

4.       Tynemouth – up £9745

1.       Newcastle – up £7927

Properties in Seaham, however, have seen their prices fall by £6775 over the past 12 months. Properties in Blyth, meanwhile have risen by an average of just £2.

Blyth has, however, seen prices rise fastest over the past 4 weeks, up 3%, followed by South Shields (2.4%). Prices in South Shields have now risen by 4.6% over the first quarter of the year.

There were above average prices falls, however in Peterlee (-1.8%) Sunderland (-1.7%) and North Shields (-1.4%)

A fall of 1.3% in Darlington sees it named April’s Best to Buy. House prices in the town are now 3% lower than the start of the year.

84.3% of properties in Darlington are privately owned, compared to the North East average of 76.8%. 38% of these properties are semi-detached and 31% terraced.

36% of properties are occupied by couples not living with children, and the average household contains 2.2 people. 17% of properties are privately rented, with a further 11% rented from the local authority or registered social landlords.

32.8% of residents are aged between 24 and 49, with more residents aged 47 than any other age. 23 residents are over 100 years old.

Rental Market Analysis

A typical North East property costs £548pcm to rent, £7.50 less a week on average than this time last month.

Regional rents are £12 lower than this time last year – a fall of 2.2% from £560pcm in April 2014 to £548 now.

Gateshead once again offers the region’s best return to landlords with a rental yield of 6.6%, despite a month-on-month fall 0.1%. Other regionally strong performers are Petelee (5.2%), Killingworth (5.1%) and Sunderland (5%).

Average yields fell slightly to 4.3% (-0.2%) despite noticeable rises in Blyth (0.6%, up 1.2% in 2 months) and Killingworth (0.4%). Washington recorded a striking fall of 1.2%.

Killingworth’s rising yield sees it named this month’s Best to Invest. The town offers landlords a return on their investment almost identical to that on offer in its near neighbour of Newcastle – but properties in Killingworth are on average £36,965 cheaper.

41% of properties in the town are semi-detached, with 21% of homes occupied by couples with children, 18% couples without children and 14% by just one person.

KIS Group Founder and Chief Executive Officer Ajay Jagota responded to the figures.

Ajay said: “It’s striking how much the North East property market has turned around in the past 12 months, even if growth is non-existent right now. Again we’re seeing the value of highly localised analysis like ours – South Shields homes are worth £11,000 more than this time last year, Blyth homes are worth £2 more.

“Across the region prices have spent another 4 weeks vegetating – down this month by less than half of 0.1%. There’s next to no change from month to month at the moment, and it seems like the prices we have at the moment are the new

normal, for the time being at least.

“That doesn’t mean that prices aren’t changing from area to area – in Blyth they’re up 3% month-one-month, even if as we’ve seen they’ve got some ground to make up, and in South Shields they’re up nearly 5% over the first quarter of 2015.

“As a whole though, there’s a lot of pent up energy to be released once the uncertainty of the General Election is over – especially with both of the parties guaranteed to be at least the largest party in the House of Commons pledged to cut Stamp Duty.

“Although yields for investors remain very competitive, rents appear to be falling in the region. Not only are they down £30 this month, they’re down 2.2% year-on-year. Areas like Newcastle and Gateshead have actually seen rents fall by over one percent this year alone.

“I have always had misgivings that rent caps are the right solution for renters, with a lot of the evidence suggesting they actually force rents up.

“Even if that proves not to be the case these figures show that in the North East rent caps are completely unnecessary as over the course of the year they’ve actually gone down.

“At election time it’s crucial that political parties of all persuasions ensure that their policies and promises are aimed at the whole the nation, not just London and the South East. Nowhere is making this distinction more vital than over an issue as fundamental as housing.

“When it comes to where landlords are going to get the best return on their investment in the region, Gateshead is still well ahead of the pack, even though it’s rental yield is a little below the 7% you can usually expect to make at the moment, around 6.6%. Look out for Peterlee though, where an average house costs well below £100,00 and which currently gives you a return of 5.2%”. 

Landlord Expert
By Landlord Expert May 7, 2015 13:49

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