Member Article

North East house prices fall 0.5% since Election

• Predicted post-Election surge fails to materialise as North East house prices shrink by 0.5%, their fastest fall in over a year. • Prices have now fallen in 7 in the last 8 months and are now 3.8% below September’s peak • Typical home in the region valued at £153,778, £672 less than April. • Seaham (+2.9%) sees sharpest rise, Blyth (-3.3%) has biggest fall. • Average rental property costs £565pcm - £17 more than April and 0.9% higher than this time last year.

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

A widely-predicted post-General Election surge in North East property prices appears to have failed to materialise for the time being, with regional property prices falling by 0.5% over the last four weeks – their fastest fall in over a year.

House prices in the region have now fallen in 7 of the last 8 months, in every month of 2015 apart from January and are now 3.8% lower than their peak in September 2014.

A typical North East home cost £153,778 in May, £672 less than in April.

Blyth saw the region’s largest price drop, with a fall of 3.3%, followed by Gateshead, where prices fell by 2.7%. Above average price decreases were also recorded in South Shields (-2.8%) Morpeth (-2.1%) and Washington (-1.9%).

Seaham saw the region’s biggest rise, with prices going up by 2.9%. Other strong performers include Whitley Bay and Peterlee (up 1.2%) and Sunderland (1%).

Prices in North Shields have now fallen by 2.7% over the past 8 weeks, with prices in Tynemouth dropping by 2.1% in the same period.

In Gateshead prices have fallen by 3.9% over the past 3 months, leading to it being named May’s “Best to Buy”.

42% of the borough’s 89,154 households are semi-detached properties, with 27% terraced. A third of properties are occupied by just one person and 19% by a couple with no children.

Residents of Gateshead are also 3% less likely than the rest of the North East to work more than 49 hours a week.

Rental Market Analysis

The average North East property currently costs £565 per calendar month to rent - £17 more than April, a rise of 3%. This compares to £560pcm in May 2014, a year-on-year rise of 0.9%.

Easington (£372pcm) is the cheapest place to rent in the North East, while Durham City (£866pcm) is the most expensive.

Landlords and property investors can expect a slightly better return on their investment compared to last month, with rental yields rising by 0.1% to 4.4%.

Gateshead continues to offer the best rental yield in the region, with a rise of 0.2% to 6.8%. Other above average yields can be found in Peterlee (5.2%) and Durham City (5%).

Morpeth (0.9%) and Washington (0.7%) saw striking rises in their rental yield, while Whitburn’s rise of 0.4% sees the area named this month’s Best to Invest.

The price of a property in Whitburn fell by 1.2% this month, and have fallen every month this year apart from February, with the cost of a typical home down 2.9%. Rental yields in the area have risen by 1% in the same period.

26% of residents of Whitburn have professional occupations, with 13.7% managers, directors or senior officials. 40% of locals are educated to degree level or higher.

74% of properties are semi-detached, with 40% of homes occupied by families with no dependent children. 72% of properties are owner-occupied or privately rented, with 27.7% managed by registered social landlords.

Ajay Jagota, Founder and Chief Executive Officer of KIS Group responded to the figures.

He said: “Predictions that a post-Election housing boom would start the second the polls closed were always likely to be wide of the mark, but it is nonetheless something of a turn up for the books to see North East house prices fall like this.

“0.5% isn’t just the furthest fall we’ve seen this year, or even over the last 12 months – it’s the largest drop we’ve seen since we started tracking these figures.

“It’s important to remember a few things though. Firstly, these figures do include the week immediately before the election, where house buying all-but-ground to a halt. A survey of just the other 3 weeks of the month may have given some entirely different results.

“Secondly, these prices don’t seem to reflect activity levels being reported in Estate Agents throughout the region – you can’t help but notice how many For Sale boards seem to have gone up in the last fortnight or so.

“It could be that this hasn’t yet been reflected in the prices, which can sometimes lag a little behind activity levels, or even something as mundane as lower-valued homes being the first to market.

“Thirdly, we’re still seeing prices which we would have been glad to see even this time last year – it’s important to remember than even in the midst of this comparative slump, prices are still around 10% higher than 12 months ago.

“Finally, I’d predict that the legislative programme announced in this week’s Queen’s Speech is bound to have an impact on prices.

“Not only will the planned Housing Bill give cities more powers to build homes and help builders get access to plots of land, the extension of the Right to Buy socially rented homes and the rise of privately-owned properties is likely to drive up house prices in the same way it did in the 1980s.

“If I was looking to get my first foot on the ladder, I’d be looking sooner rather than later”.

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