• Bumpy start to 2017 for North East property – but house prices remain 5% higher than this time last year. The fall is identical to the fall recorded in January 2016.
• More than £5000 lost from value of typical property
• Property prices fall in all areas, including a fall of 6% in Houghton-le-Spring. 5.1% in Killingworth and 4.9% in South Shields.
• Regional rents rise to £586pcm – a year-on-year rise of 5%.
• Newcastle gives better returns for investors than Gateshead for the first time
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.
Property Market Analysis
North East house prices have started 2017 with a bump – falling by 3.1% over the first four weeks of the year. Prices fell across the board, wiping £5200 from the cost of an average North East home.
A typical North East home will currently cost you £163,591 – 5% higher and £4836 more than the £158,755 recorded in January 2016.
The price fall is identical to the drop of 3.1% recorded in January 2016.
There were particularly striking falls in Houghton-le-Spring (-6%) Killingworth (-5.5%) and Morpeth (-5.1%)
Homes in Blyth (-1.3%) and Morpeth (-1.5%) retained their value the best.
Properties in Killingworth have nonetheless performed the strongest over the past twelve months, and are currently 6.4% higher than those recorded in January 2016. Other strong performers in this period include Cramlington (6.3%) and Tynemouth (6.2%). Prices in Darlington and Peterlee (-1.1%), South Shields (-1%) and Blyth (-0.2%) have actually fallen over the past 12 months.
Killingworth’s combination of strong annual growth and comparatively weak monthly performance see it named January’s “Best Buy”.
Rental Market Analysis
North East rents rose to £584 in January, £32 more per calendar month than this time last year – a rise of 5%.
Falling house prices nonetheless contributed to an average rise in rental yields – with property investors getting a 0.1% stronger return on their investment, as average North East yields rise to 4.3%.
Jarrow (£442pcm) remains the cheapest place to rent in the North East out of the areas surveyed, while Durham City (£1001pcm) remains the most expensive.
Peterlee retains its position as the region’s Buy to Let Capital, with an average return of 6.1% for investors. Other strong performers for rental yield include Newcastle (5.7%) Gateshead (5.6%) and Seaham (4.9%).
This is the first time that Newcastle has recorded a higher rental yield than Gateshead.
The lowest rental yields continue to be found in Morpeth landlords can expect a 3.3% return on their investment.
Yields in Jarrow and South Shields have risen by 0.4% and 0.2% respectively since the last time the areas were surveyed.
Despite slipping behind it’s Tyneside neighbour for the first time, Gateshead’s falling property prices and historic strong yield performance see it named this month’s “Best to Invest”.
Ajay Jagota, founder and Managing Director of local sales and lettings firm KIS Group and founder of Dlighted, an insurance backed deposit-free renting solution which drastically reduces the costs for tenants finding and moving homes whilst still protecting both agents and landlords against damage, responded to the figures.
He said: “January is the time when people tend to view a lot of properties, having made a New Year Resolution to move home, but the actually buying tends to come later. As such we would expect to see house prices fall back at this time of year – not least as they fell by exactly the same amount in January last year!
“It’s also been a particularly cold and dark month, which has doubtless discouraged a lot of people from house-hunting.
“The long-term trend for property values in the North East is incremental, sustainable growth – as shown by the year-on-year rise in values of 5%, which in places like Killingworth and Cramlington has added close to £1000 a month to house prices.
“There’s increasing evidence that investors are turning away from London and looking north. Increased investor demand may increasingly impact on North East property prices in 2017, for the first time since the early 2000s.
“It’s been claimed this week that demand for rental properties is at a two-year low, but that’s not something we’ve much evidence of in the North East, where rising rents and returns for investors indicate strong demand.
“Certainly the most eye-catching fact about the state of the residential renting market in the North East is the fact that for the first time landlords in Newcastle are currently getting a better return on their investment than those in Gateshead”.