Member Article

North East house prices rose 1.2% in July

• North East house prices rose 1.2% in July – a near-identical rise to June. A typical North East home was worth £1825 more this month than last.

• Seaham continues to boast the region’s highest rental yield of 5.6% but a fall in rents of 1.4% sees it surrender its “Best to Invest“ crown to North Shields, where a surprise fall in property prices seems to be accompanied by a rise in demand for homes.

• Rents remain flat, with the average monthly rent in the North East rising by £2 to £566. North East rents are currently rising ten times more slowly than inflation.

• Whitley Bay is KIS’ tip for “Best to Buy“, with the region’s highest price-to-rent ratio and average rents well in excess of a typical monthly mortgage repayments, while Killingworth is “Best to Rent, with a low and falling price-to-rent ratio and an above-average rise in prices.

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.

House prices in the North East have risen by 1.2% during July, a near identical rise to that seen in June. Over the past 3 months, prices have risen by an average of 0.86%. A typical North East home now costs £158,716 - £1825 more than four weeks ago.

The highest rises were seen in Gateshead, where houses are 3% more expensive than June, followed by Washington (2.6%) and Jarrow (2.5%). Prices rose by 1.1% in Seaham, following two months of falls, with Blyth (1.1%) and Cramlington (1.4%) returning to rising in July following falls in June.

There were surprise price falls of 0.6% in North Shields and 0.5% in Houghton-le-Spring. The former seems to be enjoying a rise in demand for homes, making it July’s “Best to Invest” tip. Last month’s “Best to Invest” Seaham continues to offer the region’s highest rental yield for investors of 5.7%, followed by Peterlee (5.4%) and Killingworth (5.1%)

For those looking to buy a house to live in, KIS’ “Best to Buy” tips this month are Whitley Bay, which boasts the region’s strongest Price-to-rent ratio of 27.6, and an average rent of £609 well in excess of a typrical monthly mortgage repayment of £484.

Over the past three months, Newcastle and Gateshead have recorded the highest cumulative rises of 5.8%, followed by Killingworth (5%), Washington (4.6%) and Morpeth (4.3%) Rental Market Analysis North East rents continue to remain static, rising by just £2 (0.2%) over the last four weeks.

This rise is ten times less than the current rate of inflation (1.9%). 0.2% is also the average monthly rent rise over the past 4 months, with rental yields for landlords reporting a month-on-month rise of the same figure.

Darlington and Easington saw rents recover after falls in June, with rises of 1.5% and 3.4% respectively suggesting renewed demand following falls of 2.2% and 2.5% in June. Darlington rents remain 2.9% lower than 3 months ago, however.

There was a surprise fall of 1.4% in Seaham. Killingworth is this month’s “Best Place to Rent”, with the cost of renting falling in comparison to the cost of buying to the third lowest total in the North East and above average property prices rises.

KIS Founder and Managing Director Ajay Jagota responded to the figures. He said: “Our figures appear to contradict recent reports of North East property prices falling back again, but it’s certainly clear that they are at best rising only modestly.

“For now at least this could be viewed in positive terms. While there are reports of the property market cooling ‘dramatically’ and ‘rapidly’ in some parts of the country following rapid rises, prices in the North East appear to be continuing to rise at a stable and sustainable rate, meaning good returns for sellers and good deals for buyers.

“The important thing is this state of affairs being maintained. I’ve previously warned of the media and the Bank of England talking the property market back into a slump, and in the same way there was a lag between prices recovering nationally and recovering in the North East, there has to be a fear that the same thing could happen if prices falling back again – which is why up-to-the-minute analysis like ours is so crucial. “We’ve also seen reports lately of the cost of renting falling in the region. Although our figures appear to bear that out, with rents rising by nearly ten times less than inflation, you have to take those figures with a pinch of salt as some figures bandied about don’t include the cost of deposits.

“These appear to have risen by 50% in recent years, with half of people needing to borrow money just to pay them, including from payday lenders. It’s hidden costs like these which make it harder for people to find homes to rent and landlords to find good tenants, and it’s why we’ve abolished deposits altogether.”

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