Member Article

North East housing prices fall by 0.3%

• North East housing prices fell by 0.3% in October, the first fall in at least 6 months • Prices fall in by most in Seaham (-2.9%), Sunderland (-2.8%), Blyth (-1.8%) and Gateshead (-1.5) • Killingworth named “Best to Buy“ with prices up nearly 5% in three months. • Average house price in the region is now £157,430, £219 lower than September. • Average rent is £592 – up £13pcm from last month. • Gateshead remains “Best to Invest“ with cheaper property prices coupled with the region’s highest and rising rental yield of 7.1%.

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 property prices fell by 0.3% in the four weeks – their first reduction since KIS Housing NOW was launched in April. A typical North East home was £219 cheaper in October than in September.

Prices are nonetheless 7.6% higher than they were in May.

Prices slipped back by the highest amount in Seaham (-2.9%), Sunderland (-2.8%), Blyth (-1.8%) and Gateshead (-1.5). Falls were also recorded in Darlington, Houghton-le-Spring, South Shields, Tynemouth, Washington and Whitburn.

Several areas did however record rises, including Durham City (3.1%) Easington (2.3%) North Shields (1.8%) and Killingworth (1.7%).

The later is named this month’s “Best to Buy”. House prices in Killingworth have risen by 4.7% in the last three months, and the town is the lowest 3% of areas in the country for crime, and top 25% for the standard of its living environment. 43.4% of people in Killingworth are classified as families with no dependent children and 23.5% of residents have degrees or higher qualifications, suggesting popularity with first-time buyers and young professionals.

Killingworth has a very balanced mix of housing types, with 22% of properties detached homes, 22% semi-detached homes and 22% terraced homes. For buyers looking to put down roots, Killingworth’s schools also boast above average results at Key Stage 2 and GCSE.

Rental Market Analysis

It costs £592 per calendar month to rent a home in the North East - £13 more than last month. Blyth and Easington are the cheapest places to rent a home.

Average rental yields for landlords in the region are 4.6%, up 0.1% over the last four weeks.

Gateshead continues to offer the highest rates, with rental yields of 7.1%, a rise of 0.8%. Yields also rose noticeably in Cramlington (0.7%) and Morpeth (0.6%) but fell back surprisingly in Durham City (-0.7%) and sharply in Whitburn (-0.9%).

The former is particularly popular with single occupiers, with 47% of households containing just one person. 63.5% of people in Gateshead are in fulltime employment or are students – and over three-quarters of properties are flats, maisonettes or apartments.

Seaham also offers good investment opportunities, with yields rising to 5.4% as property prices fell by 2.9%. Easington also saw rental demand rise at a faster rate than property prices.

KIS have recently changed the methodology of our regional rent price calculations, making comparisons with previous months difficult.

Sarah Johnstone, Branch Manager of KIS North Shields, responded to the figures.

She said: “It’s important to remember that one set of result is not the same thing as a trend, but it could well be the case that the cooling of the property market reported in the rest of the UK has now reached the North East.

“It’s even more important to remember however that even if local prices did slip in September, they are still much stronger than even six months ago.

“Gateshead is a good example of this. Down by 1.5% in September but still up by 6.8% up over the last few months. In fact, prices in the region are in the region of £20,000 stronger than when KIS Housing Now launched in April.

“What is clear is that the North East is as attractive as ever a location for property investors, with clear rising demand for good quality rental homes matched with strong rental yields, and this month falling prices too.”

The report is available in full here

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