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North East property prices see slow start to the year
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
Latest data released by KIS Housing has shown that North East property prices have had a rocky start to 2017. Prices in the region have fallen by 3.1% in the first four weeks of the year.
This means that the average costs of a home in the North East currently stands £5,200 less than at the beginning of 2017.
North-East Prices
At present, a home in the North East will set you back £163,591, which is 5% higher than the £158,755 recorded in January 2016. Interestingly, the price fall recorded last year is identical to the one seen last month.
The most prominent falls were found in Houghton-le-Spring (-6%), Killingworth (-5.5%) and Morpeth (-5.1%).
Properties in Killingworth have performed best over the period, currently 6.4% higher than those seen in January 2016.
Rental Rises
Rents in the North East increased to £584 in January, £32 or 5% higher than the same time last year.
Despite house prices falling, rental yields rose slightly by 0.1%, increasing the average North East rental yield to 4.3%.
The cheapest place to rent in the North East is Jarrow, while Durham City is the most expensive.
Peterlee offers the highest yields, with investors enjoying an average return of 6.1%. Other good performers were Newcastle (5.7%), Gateshead (5.6%) and Seaham (4.9%).
North East property prices see slow start to the year
January Blues
Ajay Jagota, founder and MD of KIS Group, noted: ‘January is the time when people tend to view a lot of properties, having made a New Year Resolution to move home, but the actually buying tends to come later. As such we would expect to see house prices fall back at this time of year – not least as they fell by exactly the same amount in January last year!’[1]
‘It’s also been a particularly cold and dark month, which has doubtless discouraged a lot of people from house-hunting. The long-term trend for property values in the North East is incremental, sustainable growth – as shown by the year-on-year rise in values of 5%, which in places like Killingworth and Cramlington has added close to £1000 a month to house prices. There’s increasing evidence that investors are turning away from London and looking north. Increased investor demand may increasingly impact on North East property prices in 2017, for the first time since the early 2000s,’ he added.[1]
Concluding, Jagota said: ‘It’s been claimed this week that demand for rental properties is at a two-year low, but that’s not something we’ve much evidence of in the North East, where rising rents and returns for investors indicate strong demand. Certainly the most eye-catching fact about the state of the residential renting market in the North East is the fact that for the first time landlords in Newcastle are currently getting a better return on their investment than those in Gateshead.’[1]
[1] http://www.propertyreporter.co.uk/property/north-east-property-sees-a-bumpy-start-to-2017.html
