Rents in Newcastle are rising faster than London – but that doesn’t tell the full story of rent rates in the North East.
Insurance company HomeLet this week reported that rents in Newcastle rose by 16% in 2015 – the second highest rate in the country and 5% bigger than London. Only Bristol and Brighton – where rents rose by 18% – saw a faster rise.
Figures from North East-based sales and lettings firm KIS, however, show that rents across the region actually dropped by 2.7% in 2015, falling from £569 per calendar month in January to £554 in December.
Despite Newcastle house prices rising by £13,000 over the course of the year – the third fastest rate in the region – KIS’ figures also show Toon rents falling by 2.6%, from £789pcm to £769. KIS did however record an annual rent rise of 16% in Morpeth.
Further figures showed that Londoners are on average spending 62% of their salary on rent. In Newcastle that figure is just 34%.
Ajay Jagota, founder and Managing Director of KIS, and creator of d_lighted, a rent-free insurance backed deposit-free renting solution which slashes the costs of tenants finding homes and landlords finding tenants, responded to the figures.
He said: “Even if rents are rising faster in Newcastle than London, you’re still much better off living in the Toon. In London your rent costs you almost two-thirds of your wages. In Newcastle, it’s half that.
“HomeLet’s figures are very different from ours, and even thought we don’t dispute them, there’s always a limit on what you can learn about the regional housing market just by looking at one single city.
“Not only do our statistics suggest that North East rents were flat or worse in 2015, our monthly Metro rent map shows how there are huge differences in prices inside of Newcastle, let alone outside of it. Moving from Byker Metro station to Chillingham Road will cost you £108 a month, and there’s a £101 a month difference between one side of Jesmond and the other.
“What both HomeLet’s and our figures both tell you is that the North East is becoming a more and more attractive location for property investors.
“From an investment perspective, both Newcastle and the North East as a whole remain a good bet for landlords, especially in an uncertain economic climate.
Even if rents have fallen back a little over the past few months, rental yields remain as strong as they were and across the board price increases of 10% are not out of the question in 2016.”