Member Article

North East house prices return to 2008 levels

Newly-released figures from the Office of National Statistics show that North East house prices have returned to pre-crash levels for the first time –hailed by one property expert as “a major milestone”.

Data released this week shows the average cost of a home in the region is now £150,000 - the highest level since September 2008, and 14% higher than the low of £129,000 recorded in April 2009.

The figures also show that house prices in the North East fell every month in 2010 and 2011, and for six months of 2012.

Prices in the region rose by 4.9% in the year to June, half as fast as the national rate of 10.2% and nearly four times slower than the 19.3% rise recorded in London. The North East remains the English region with the lowest average house prices in the UK, although Wales has seen the smallest annual growth with a year-on-year increase of just 3.5%.

The figures were welcomed by Ajay Jagota of sales and lettings business KIS. The firm operates branches in South Shields, North Shields, Sunderland and Welwyn Garden City and expanded into residential sales earlier this year, having been named Letting Agent of the Year at the 2013 Landlord and Letting Awards.

Ajay said: “This is a major milestone for the North East – a sure sign that confidence and momentum are finally returning to the regional economy.

“The fact that prices are rising North East economy at the second slowest rate in the country and four times slower than London, however, tells you our economy isn’t exactly speeding yet - but it’s clear that the engines are motoring at long last.

“If there is a cloud on the horizon, it’s the fact that wages aren’t keeping pace with house prices. If interest rates are about to rise, as is widely predicted, many households could find their finances rapidly stretched to breaking point.

“As a member Shadow Monetary Policy Committee I have argued for some time that there is little immediate pressure on our Bank of England equivalent to raise interest rates. With consumer spending and household debt remaining hesitant, at this stage it would be positively unwelcome and unless it comes hand in hand with comparable rise in household incomes it could even lead to a spate of repossessions far faster than you might think.”

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