Member Article

North East housing prices rise by fastest rate in 5 months.

• North East housing prices rose by 1.5% in September – the fastest rate in 5 months. • Cramlington, Morpeth and North Shields record highest rises of 3.3%. Prices fall in Sunderland and Durham City. • Cramlington named “Best to Buy“ with prices up 4.4% in two months. Prices in Jarrow have risen by 5.7% in the same period and in Gateshead by 5.2%. • Average house price in the region is now £157,649, average rent is £579 – up £4 from August. • Gateshead named “Best to Invest“, offering highest rental yield of 6.3% to landlords.

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 Price Analysis

North East house prices rose by 1.5% last month, up from 1.2% in June and July and the highest rise recorded since April. The average cost of a house in the region is now £157,649.

Cramlington, Morpeth and North Shields recorded the joint highest rises of 3.3%, followed by Whitley Bay with 2.7%.

Durham City and Sunderland recorded surprise falls of 2.4% and 0.4% respectively. This is Durham’s second successive fall, with prices down 3.3% in two months.

Prices in Cramlington have now risen by 4.4% in two months, a rise only surpassed in Jarrow (5.7%) and Gateshead (5.2%).

Cramlington’s results see it named this month’s “Best to Buy”. Statistics from the ONS show the area to be in the top 2% of places in the UK for its living environment, lowest quarter for crime rate and its economic activity levels are above the national average. 36% of householders in Cramlington are classified as “one family with no dependent children”, suggesting a popularity with young professionals.

Rental Market Analysis

KIS have changed the methodology of our regional rent price calculations this month, making comparison with previous months difficult.

The average monthly rent in the region currently stands at £579. If our methodology is comparable, this is £4 (or 0.7%) up from August.

Gateshead offers the region’s best return for investors, with an average rental yield of 6.3% - close to a third higher than the regional average of 4.3%. Peterlee (5.4%) Seaham (5.2%) and Killingworth (5.1%) offer the next strongest yields.

Gateshead’s impressive returns for investors see it named this month’s “Best to Invest”. The area is particularly popular with single occupiers, with 47% of households containing just one person. 22% of people living in the borough are students, with 53% in full-time or part-time work or self-employed. 76% of properties in Gateshead are flats, maisonettes or apartments.

KIS founder and Managing Director Ajay Jagota responsed to the figures.

He said: “With North East house prices rising at the fastest rate since April, these figures could suggest that talk of a cooling in the UK housing market has been premature, or at least that that cooling has yet to reach our region.

“What remains clear is that in order to safeguard a stable housing market in the future, the supply of housing has to keep pace with demand. But figures out this week suggest that these house building has been in a continual state of decline since the 1970s.

“In 1997 an average house cost 3.5 times the average wage. That has now almost doubled to 6.7. This means more people turning to renting, which is good news for landlords, but they need homes to live in too.

“In recent weeks I’ve called for the party conferences to commit to putting that right. I’m far from a cheerleader for the Labour party, but I was pleased to see them committed to building 200,000 homes a year this week and would hope and expect the Conservatives and Liberal Democrats to follow suit in the following weeks.”

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