- North East housing market continues lethargic start to the year with prices falling by 0.7%
- Fall driven by significant price decreases in Easington (-5%) and Jarrow (-3.8%). If these two areas are removed from the statistics the region records near-zero growth.
- Average North East home currently costs £154,950 – 44% below the national average – the week one street in Washington was named the cheapest in the UK.
- Blyth named “Best to Buy” with prices rising by 29 times the regional average over the first two months of the year. North and South Shields record highest rises (1.7%)
- Easington’s declining prices see the area named “Best to Invest” with its rental yield rising by 0.9%, making it the fourth best area in the landlord profit.
Property Price Analysis
The North East housing market has continued its lethargic start to 2015, with house prices falling by 0.7% over the past 4 weeks.
This decline is driven by sharp slumps in Easington (down 5%) and Jarrow (down 3.8%) and if these places are removed from KIS’ analysis of the housing market in twenty regional areas house prices have in fact risen in the region by 0.06% – near zero growth.
North and South Shields recorded the region’s highest rises of 1.7%, followed by Morpeth and Tynemouth (1.4%).
Blyth’s rise of 1.1% takes its growth so far this year to 4.4% – 29 times the regional average. North Shields also continues on a strong upward trend, rising by 2.9% in January and February.
Price drops were recorded in 10 of the 20 areas surveyed, including in Peterlee (-2.7%) Seaham (-1.7%) and even in the traditionally strong performing Durham City (-0.9%).
Blyth’s performance over the past two months sees the town named February’s
“Best to Buy”. The area is particularly popular with single people with 43.8% of household’s occupied by just one person. Almost half of homes in Blyth (48%) are semi-detached with a further 30% terraced. 83% of properties are owner-occupied or privately rented.
The average house in the North East currently costs £154,950 – 44% below the national average of £272,000.
Rental Market Analysis
The average cost of renting a North East home is £560 per calendar month – £9 cheaper than January. The typical rental yield to landlords remains unchanged at 4.4%.
Gateshead continues to offer the best return on a property investment with a rental yield of 6.5% – although this figure has fallen by 0.5% over the last 4 weeks.
Easington and Blyth saw the biggest increases in yield, with rises of 0.9% and 0.6% respectively, with student favourite Durham City also rising by 0.5% on the back of its decline in house prices.
Easington has been named this month’s “Best to Invest” with its rental yield currently the region’s fourth best, behind Gateshead (6.5%), Peterlee (5.5%) and Durham City (5.3%).
35% of Easington residents live alone and 30% of households are families with no dependent children. 18% of households are made up of lone parents and children.
The vast majority of properties in the town (80%) are terraced homes, 79.5% of which are privately rented or owner occupied, with 12.5% owned by registered social landlords and 8% by the local authority.
Ajay Jagota, founder and Chief Executive Officer of KIS Group responded to the figures.
“It’s clearly continuing to be a sluggish start to 2015 for North East house prices, with even the most optimistic interpretation of our figures showing them to be completely flat in February and up by just 0.2% over the first two months of the year.
“Looking at the figures, areas like Gateshead, Cramlington, Houghton-le-Spring and Whitley Bay are typical, with prices either flat or moving up and down by little more than a fraction of a percent.
“I have to be honest and say that these figures are hard to explain. We’ve got falling unemployment, record mortgage availability, falling inflation and even the reducing probability of imminent interest rate rises. Add to that the continuing assistance of the government’s Help to Buy scheme and you’d expect the local property market to be performing better than it currently is.
“I can only suggest that the General Election has caused the property market to go into hibernation, with buyers and sellers alike waiting to see what impact the outcome has on their household finances.
“That doesn’t mean that some areas aren’t doing very well indeed. Blyth for example is having a very strong start to the year, up 4.4% in just two months.
That’s something like 29 times the average North East rate, and North Shields isn’t far behind, up just under 3% in January and February, 15 times faster than average.
“It could of course be that Blyth has a little further to rise than some places, with Holystone Avenue being named one of the ten cheapest streets in the region by the Land Registry office this week – although that’s nothing compared to Waterloo Walk in Washington, officially the cheapest street in the UK.
“This all means there are some very good deals out there for people looking to buy a home, either to rent out or live in. Durham is always a smart investment for a landlord due to the high student population. An uncharacteristic fall in prices of nearly 1% this month makes properties there more affordable and means a higher yield for landlords, so it could well be worth a look.
“On the other hand, you’re getting a similar return on your investment in Easington, where yields are up nearly a whole percent month-on-month and where you pretty much have two properties for the price of one in Durham.
“That’s something worth saying about the North East as a whole from the investor perspective. With the average North East house half the cost of the national average and with a robust rental market and strong yields, the North East is somewhere property entrepreneurs can literally double their money.”