The North East of England is currently witnessing an extraordinary rise in property prices, defying national trends and emerging as the region with the highest year-on-year increase. While asking prices across the UK have dropped by 0.4% this month to £373,493, a larger-than-usual July decline influenced by the distractions of the General Election, sporting events, and the summer holiday season, the North East continues to shine with a monthly increase of 0.5% and a year-on-year (yoy) increase of 4.6% as of July 2024.
High-Value Areas and Rental Yields
High-value areas such as Haltwhistle, Jesmond, Tynemouth, and Ponteland are notable for their market resilience. In these locales, homes frequently attract offers above the asking price, highlighting the area's desirability. For buy-to-let investors, Sunderland stands out nationally, boasting an average gross rental yield of 8.96%, the highest in the country.
Economic Revitalisation and Investment
The North East's impressive property price growth is largely driven by ongoing economic revitalisation and significant investment in infrastructure. Developments such as the A1 expansion and new Metro trains have greatly enhanced the region’s appeal, making it a more attractive place to live and work. Major cities like Newcastle, Sunderland, and Durham have seen substantial improvements in their transportation networks, easing commuting and boosting efficiency. Although current repairs to the Tyne Bridge and Tyne Tunnel may cause short-term inconveniences, these works promise to improve long-term connectivity.
Government initiatives aimed at boosting regional development have further spurred this growth. Investments in technology hubs, business parks, and innovation centres, particularly in the Tees Valley, have been transformative. Projects like Teesworks and the Middlesbrough Development Corporation have created new jobs, homes, and attracted national businesses to the region, all as part of the Levelling Up scheme. This influx of young professionals and families seeking employment opportunities has driven demand for residential properties, including first-time buyers benefiting from no Stamp Duty on first purchases.
Affordability and Quality of Life
Compared to other parts of the UK, the North East has traditionally offered more affordable housing options. This affordability, coupled with a high quality of life, has made the region increasingly appealing to homebuyers. Recent figures confirm that the North East remains the most affordable region in the UK.
Cities like Newcastle and Durham boast vibrant cultural scenes, excellent educational institutions, and a wealth of recreational activities, making them ideal locations for families and individuals alike. The scenic beauty of the North East, with its stunning coastlines, national parks, and historic landmarks, adds to its allure. Areas such as Northumberland and the Durham Dales provide residents with the opportunity to enjoy a rural lifestyle while still being within reach of urban amenities. This balance of affordability and quality of life has been a significant factor in attracting new residents and driving up property prices.
Housing Market Dynamics
While the average asking price across the UK has increased by only 0.6% year-on-year, the North East’s prices have more than doubled this figure, all while remaining the most affordable in the UK. This unique combination, along with an increase in new-build developments by housebuilders such as Story Homes, Robertson Homes, and Avant, ensures that the North East population has access to a wide variety of properties.
Full-service property firm Bradley Hall has observed a marked increase in demand for properties. Cassie Moyse, Marketing Director at Bradley Hall, noted: “We have seen an increase in potential buyers across our North East offices. The affordability of homes in the region, and the good quality new homes that are being produced, are attracting families from the South who are looking for a better quality of life.”
Comparison with Other Regions
The North East's growth is particularly notable when compared to other regions. The North West experienced a year-on-year increase of 3.5%, while Wales saw an increase of 1.9%. All other regions saw smaller increases, underscoring the North East's significant growth.
Several factors contribute to this disparity. The North East's economic revitalisation and infrastructure investments have made it a more attractive place to live and work. Additionally, the affordability of housing in the North East, combined with its high quality of life, has drawn homebuyers from more expensive regions.
Future Prospects
Looking ahead, the North East’s housing market is poised for continued growth. Ongoing investments in infrastructure and economic development are expected to sustain the region’s appeal to homebuyers and investors. The completion of major projects, such as the expansion of the Tyne and Wear Metro and the redevelopment of key urban areas, will further enhance the region’s connectivity and liveability.
The Levelling Up scheme, promoting economic growth outside of London and the South East, has been welcomed by local leaders. Continued support for business innovation, job creation, and housing development will likely sustain the momentum in property price growth.
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