Member Article

North East house prices “may rise 10%” in 2015

A leading North East property expert predicts house prices in the region may rise by as much as 10% in 2015.

Ajay Jagota of sales and lettings firm KIS believes that reforms of pensions and stamp duty will bring a bounty of new buyers to the market, creating a “bumper year” for North East property.

Pension changes announced in last year’s Budget and due to come into effect this April will allow savers over 55 greater freedom to take their pensions as a lump sum, with so-called “silver landlords” likely to take advantage of the return on their investment offered by buy-to-let properties by buying homes to rent out, pushing up prices.

Chancellor George Osborne also announced in December’s Autumn Statement that homebuyers purchasing properties worth less than £937,000 will pay less stamp duty – cutting £1000 from the cost of buying a North East home and encouraging more buyers into the market.

Low inflation and expected delays in lifting interest rates have also led to suggestions of a “mortgage price war” as several major lenders launch New Year “record low” fixed-rate deals.

Mortgage approvals, however, this week hit a 17-month low – and are 23% down on this time last year.

Property expert Ajay Jagota, founder and Chief Executive Officer of the North East’s most innovative sales and lettings business KIS , nonetheless predicts a “bumper year” for North East property.

His firm is famous for being the first letting agent in the UK to abolish deposits, replacing them with a one-of-a-kind landlord insurance policy offering guaranteed rent, deposit replacement, legal assistance and round the clock third party emergency home repairs.

Ajay said: “Despite what the doom-mongers might tell you, 2015 has all the makings of a bumper year for North East property.

“The relaxation of pension regulations will undoubtedly bring more purchasers to the market both as owner-occupiers and buy-to-let investors, pushing up prices. At the same time, stamp duty changes will make it cheaper and easier to buy a home.

“The North East rental yields are as good as any in the UK and as rental returns rather than capital appreciation are key to making money out of property, out region stands to gain the most. As a result I think we can expect to see double digit house prices growth in the North East – 10% seems a good bet – with rents set to rise in the region of 6%.

“All the correct conditions exist in the North East - low prices, high rental yields, strong demand, affordability of mortgages – mean that if buyers and investors decide 2015 is a time to buy then the self-fulfilling prophecy could raise prices just like they did in London.

“As a result, bargain hunters need to strike early to get the best deals, and should stick clear of signing lengthy tenancy agreements if they’re renting at moment and are looking to purchase”.

KIS manage properties for landlords in every corner of the North East from branches across Tyne and Wear, were named Letting Agent of the Year in the 2013 Landlord and Letting Awards and finalists in 2014. The firm expanded into residential sales in 2014.

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