North East house prices £10,000 up on this time last year as Parliament returns
 
Published on 01 Sep 2017

•    Average home worth £9137 more less at the end of July than at the end of June
•    Property values rise 1.1% - after falling in five of the last six months.
•    Prices rising fastest in Durham City, Killingworth, Houghton-le-Spring and North Shields, with Peterlee properties rising fastest over the past 12 months.
•    Average rents go back past £600pcm.
•    Average yields for investors rise to a little under 4.4%, with Peterlee properties offering returns of 6.3%

 

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 indispensable guide to the state of the North East property market.

Property Market Analysis

North East property prices have defied gloomy predictions and to rise 1.1% over the last four weeks – with current values almost £10,000 higher than this time last year.

A typical property in the region is currently valued at £166,574 – a month-on-month jump of £1823 in cash terms.

The rise compares to a fall of 2.3% recorded in August 2016 and follows falls in six of the previous seven months. Prices rose 1.8% in August 2015 and 1.2% in August 2014.

Prices are also 4.3% higher than those of twelve months ago, with a typical house now valued at £9137 more in cash terms than twelve months ago.

Prices were up in 14 of the 20 areas surveyed, with property values rising fastest in Durham City (3.9%), Killingworth (3.8%)  Houghton-le-Spring (2.7%) and North Shields (2.3%)

House values fell in Easington (-2.1%) Blyth (-2%) Peterlee (-1.7%) Cramlington (-1%) and Jarrow (-0.1%)

Prices in Peterlee have performed the strongest over the past 12 months, rising by 6.3%. Other strong annual performers include Gateshead (5.6%) South Shields (5.4%) and Killingworth (5.3%). 

Rental Market Analysis

North East rents rose slightly to £605 per calendar month – but remain 0.6% lower than twelve months ago.

Average rental yields have risen slightly with,  with property investors currently seeing an average return on their investment a little under 4.4%.

Investors in North East property continue to see noticeably higher returns than those who have invested in London (average yield 3.2)

Blyth (£427) continues to be cheapest place to rent in the North East out of the areas surveyed, followed by Houghton-le-Spring (£444). Tynemouth (£1094pcm) 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 6.3% for investors. Other strong performers for rental yield include Gateshead (5.6%) and South Shields (5.4%).

Ajay Jagota, founder and Managing Director of Keep It Simple and Dlighted a Proptech company that delivers a Deposit replacement insurance solution which is an alternative to the cash Tenancy Deposit schemes TDS, DPS and Mydeposits.

He said:

“Last month I wondered whether the slow reversing of North East house prices we’ve seen over the past few months was a trend or a blip – we could very much say the same about this month’s 1.1% increase.

“With Parliament resuming next week what lies ahead depends on coming government interventions and whether they stifle or advance the market.

“What is clear though is that despite a lot of gloomy talk in the media about ‘tumbling house prices’ not only have average North East house prices risen by close to £10,000  over the past 12 months, our monthly growth is not only consistent with rises recorded in previous Augusts – it significantly surpasses the 2.3% drop we saw this time last year.

“National data suggests that across the country house prices fell 0.1% in the last period for which figures are available, with annual growth running at about 2.1%. On the basis of those figures the North East is out-performing the rest of the country, with prices rising twice as fast as national averages as a whole and even faster in places like Peterlee, Gateshead and South Shields.”

“Rental yields have also kept pace with capital appreciation, and I challenge investors to find a savings rate comparable to the 3.4% return you would see from a modestly performing area like Washington, let alone the 5.4% or more you can get in South Shields.”

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