Member Article

North East house prices rose 1.1% in June

• North East house prices rose 1.1% in June – three and a half times faster than May. A typical North East home was worth £1677 more this month than last.
• Region still lags behind the rest of the UK, with a predicted annual growth of 8.4% compared to 31% in Brighton and 26% in the London Borough of Waltham Forest.
• Seaham is North East’s “Best to Invest“ this month, with some of the region’s strongest and rising rental yields (5.6%), dipping house prices, rising demand for rental properties and attractive buy-to-rent ratios for tenants.
• Average rent in the North East rent rose by £5 to £565, “driven by Durham“, where rents rose by 5%.
• South Shields is KIS’ tip for the “Best Place to Rent“ with the regions’ second highest rise in house prices and typical rents (£489) near identical to average mortgage rates (£483).

Published montlhy by local proeprty firm KIS, Housing NOW – Housing North of Watford - pulls together the most authoritative and up-to-the-minute data and the expert market analysis to provide an indispensible guide to the state of the North East property market.

This month’s report shows North East property prices rose by 1.1% in June, three and a half times faster than May (0.3%). An average property now valued at £152,908, £1977 more than four weeks ago.

There continues, however, a good deal of volatility from area to area.

If the trends of the past eight weeks were to continue throughout the year, property prices across the region would rise annually by 8.4%. This compares to predictions of 31% in Brighton and 26% in Waltham Forest.

Durham City recorded the highest monthly rise of 3.8%. The second largest rise occurred in South Shields (3.8%), where property prices have risen by 5.7% in two months. Similarly on the other side of the Tyne, prices in North Shields rose by 3.1%, up 5.1% in two months.

Blyth (-2.7%) Cramlington and Seaham (-1%) recorded falls, the later for the second consecutive month, with prices down 3.8% in eight weeks. Seaham’s rental yields for investors, however, remains strong.

North East rents remain broadly static, albeit rising at a faster rate than last month. Typical prices rose by £5, driven by Durham City, where rent rose by 5%, perhaps driven by dwindling stocks of student accommodation at the close of the academic year.

Rents in Darlington have fallen noticeably in the last eight weeks, down 4.4% since April. Rents also continued to fall in Easington (-2.5%) and Peterlee (-1.2%)

Rental yields in the region stayed constant, with a modest fall from 4.6% in May to 4.4% in June. The highest rental yields in the region can currently be found in Seaham, where investors can expect a 5.6% return on their investment. Gateshead (5.4%) and Peterlee (5.3%) where also regional hotspots. The lowest yields this month are to be found in Whitley Bay (3.3%).

Seaham is KIS’ “Best to Invest” tip for property investors this month, with strong and rising yields for investors and modestly falling prices.

South Shields is KIS’ tip for the “Best Place to Rent” with with the regions’ second highest rise in house prices and typical rents (£489) near identical to average mortgage rates (£483).

KIS founder and Managing Director Ajay Jagota responded to the figures. He said: “The property market in the North East is generally positive at the moment, with considerableactivity in terms of purchases and sustained yet sustainable price rises. There continues to be huge variance from area to area, with a 6.5% difference between the falling prices in Blyth and the rising prices in Durham.

“Not only does this show the value of both localised analysis like ours and making investment decisions guided by expert local knowledge, it shows how vital it is the Bank of England gets the measures is it expected to announce this week to cool the property market.

“In many parts of the North East, the property market continues to need anything but cooling. Treat a South East problem as a national one and you won’t just be cooling the property market, you’ll be cooling the entire economy.

“A little local knowledge goes a long way in property. Investment orthodoxy could well lead you away from areas traditionally less fashionable areas the A19 corridor, but our analysis continues to suggest that’s where the highest rental yields are often to be found.

“Seaham in particular looks like a good place to find a bargain right now, although South Shields seems one to watch in terms of property prices.”

This was posted in Bdaily's Members' News section by Ajay Jagota .