The North East Property Market has for a long time been one of the strongest areas in the UK for buy-to-let investors and the latest figures suggest that this isn’t changing anytime soon.
So far in 2018 South Tyneside has seen a 9.4% rise in house prices taking the average property value to £137, 506, a figure slightly less than the £165,359 average of Newcastle who also saw a 4.1% growth in house prices.
According to NEPI the proportion of existing landlords in the north east of the UK looking to purchase additional north east properties has increased in 2018 to just under 20%. A figure that is unsurprising when you consider that rental yields also grew by 4.8% over the last year.
Previously small towns in the area like Gateshead, located just 5 miles outside of South Tyneside, are also seeing momentous opportunities for investment in the property market arising.
Jonathan Stephens, of Surrenden Invest, told the Telegraph: “It’s one of those regional towns that has burst into the spotlight thanks to a combination of factors, including being the second fastest-growing economy in the North East,”.
With the rest of the UK is seeing buy-to-let markets weaken, specifically in areas like London where recent Government policies have made it more expensive for landlords, the North East appears to be bucking the trend. This potentially could be due to it being one of the cheapest house markets in the UK making it a low-risk investment for those new to property market investment.
As those with already strong property portfolios seek to dodge the new stamp duty levy for overseas investors, its predicted that this is a trend that will continue at the expense of young adults and first-time buyers in the area.
In an interview, Polly Simpson, a research economist at the IFS said: “Big increases in house prices compared to incomes mean that it is increasingly difficult for young adults to get on the housing ladder, even if they do manage to save a 10% deposit,”.
Many young adults cannot borrow enough to buy a cheap home in their area, let alone an average priced one. These trends have increased inequality between older and younger generations, and within the younger generation too.”
With Brexit on the horizon, it’s impossible to predict the fluctuations of an increasingly unstable UK property market, however, if the current trend is to continue the future is bright for northern buy-to-let investors but significantly less so for their tenants seeking to get their foot on the first rung of the property ladder.