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 indispensable guide to the state of the North East property market.
Property Market Analysis
North East property prices fell back slightly in October but remain 4% higher on average than this time last year – with homes in some areas valued 10% higher than twelve months ago.
Figures from regional property firm KIS show that average house values in the region dropped 0.8% in October, wiping out 0.6% growth recorded in September.
A typical property in the region is currently valued at £166,335 – a month-on-month fall of £1314 in cash terms.
Prices are also 3.9% higher than those of twelve months ago, with a typical house now valued at £6257 more in cash terms than the end of September 2016.
Property values fell in 15 of the 20 areas surveyed at the end of October 2017, with property values falling fastest in Sunderland (-5.4%), Killingworth (-3.1%) Durham City (-2.4%) and Jarrow (-1.8%)
Values rose the most in Blyth (0.7%) and Peterlee, Whitburn and Easington (0.4%)
Prices in North Shields have performed the strongest in percentage terms over the past 12 months, rising by 9.9%, a leap of £17,542 in cash terms. Properties in Tynemouth have appreciated in value by the most in cash terms, with a percentage rise of 9.1% pushing prices up by £24,471.
Other strong annual performers include Durham City (7.4%) Blyth (6.6%) and Whitley Bay (6%).
Rental Market Analysis
Average North East rents have risen to £639 per calendar month.
The combination of this rise and falling property prices has pushed rental yields for property investors to an annual high of a 4.6% return on their investment, up from 4.4% last month.
Investors in North East property continue to see noticeably higher returns than those who have invested in London (average yield 3.2)
Blyth (£425) continues to be cheapest place to rent in the North East out of the areas surveyed, followed by Houghton-le-Spring (£448). Durham (£1301pcm) and Tynemouth (£1145pcm) are the region’s most expensive.
Durham City is named the region’s Buy to Let Capital for the first time, with an average return of 6.8% for investors. Other strong performers for rental yield include Peterlee (6.2%) Newcastle (6.1%) and Gateshead (5.4%).
Ajay Jagota, founder and Managing Director of KIS Group and Dlighted a deposit replacement insurance that delivers a Zero Deposit renting solution which is an alternative to the cash Tenancy Deposit schemes of TDS, DPS and Mydeposits.
KIS was the first letting agent in the UK to abolish cash deposits, replacing them with Dlighted’s zero deposit insurance policy offering landlords over £600,000 of asset and income protection for rent, damage and legal cover.
“It’s entirely unsurprising to see a modest fall in property prices at this time of year – not only are the nights drawing in making people less likely to want to view houses, no-one really wants to move house close to Christmas.
“In fact, once you remove outliers like Sunderland and Durham from the figures, prices are effectively stable, which is a positive sign at this time of year given so much economic uncertainty.
“What is absolutely clear is that North Tyneside is driving property prices forward in our region , with Tynemouth, North Shields, Blyth and Whitley Bay all the biggest growers over the past 12 months.
“The North East also remains an exceptional bet for buy-to-let investors, with returns up to an annual high of close to 5%, with some areas offering 7%.
“Rising rents are pushing up deposits, which doesn’t help renters. With the government deciding to cap deposits at 6 weeks rent, this means people looking to start tenancies in places like Durham City, Tynemouth and Newcastle will have to find between £1500 and £2000 just to move in. This is hardly a better deal for tenants when they could easily be renting deposit free.”