Member Article

North East house prices rose 5.2% in 2015

House prices in the North East rose by 5.2% in 2015 – and one leading property expert believes they could rise by twice as much in 2016.

Research by sales and lettings firm KIS shows that the rise – which added £6252 to the value of the average house in the region – came despite a pre-Election slowdown which saw prices fall by 2.5% from February to May.

Prices then fought back strongly in the summer - rising by 3.8% in July and 1.8% in August. Figures released by the firm last week revealed prices also rose by a fraction under 1% in December, traditionally a slow month for the property industry.

Ajay Jagota, founder and Managing Director of local sales and lettings firm KIS Group and founder of Dlighted, an insurance backed deposit-free renting solution which drastically reduces the costs for tenants finding and moving homes whilst still protecting both agents and landlords against damage, responded to the figures.

KIS are famous for being the first letting agents 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

He said: “I have to admit that this time last year I anticipated seeing North East house prices rising by closer to 10% over the course of 2015, but I did not anticipated quite how much of an impact the General Election would have.

“Things always slow down in the run up to an election, not just in property but in the wider economy. It stands to reason that with so much policy difference between the parties people generally wait for the outcome of an election before deciding to sell or buy a property -but I was expecting to see prices flat, not falling, in the run up to the poll.

“To put the impact into context, we would have seen house prices at least 2.5% higher than they are now if 2015 had not been an election year.

“This means that a rise of that sort of scale is now overdue and 10% prices rises in 2016 are more than possible – something backed up by the fact we’ve just seen prices jump 1% in December, when people’s attention is usually on buying presents rather than property.

“One of the emerging trends in property over the past few months has been investors turning their attention away from London to look further North and places like Leeds and Manchester. 2016 could well be the year their interest reaches the North itself, especially given the fact that our region continues to offer a return on their investment as strong as anywhere.

“The big unknowable is the impact of the European Union referendum. We’ve seen this year how much of an impact elections can have on property prices, and when it comes to a vote on staying or leaving the EU we really are in unchartered territory.

“What will be key to North East property prices is jobs. 2015 was a very mixed year, with big successes in Durham with Hitachi, but huge disappointments when it comes to steel-making on Teesside.

“Ultimately we need to attract more major employers to the region, and to do that we really need to work out what our region does best and brand ourselves better. I think greater devolution under the North East Combined authority could be key to that.”

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