Property prices in the North East have enjoyed a resurgence both in the lead up to and in the aftermath of the EU referendum.
Statistics released from North East sales and lettings firm KIS shows that house price values in the area increased by 4.8% in the last four weeks. This has added £8604 to the value of an average home in the region.
Regional rises
This rise comes on the heels of a 0.4% increase recorded in May and means that house prices in the area are now positive in 2016. Previously, they had fallen by 3.1% and 4% in April.
The average North East property is now valued at £165,039. Prices are 6.5% greater than those seen in June 2015.
In fact, house values rose in all of the twenty regions surveyed, with rises recorded ranging from 0.7% in Gateshead to 9% in Durham City. The strongest regions in terms of growth include Tynemouth (7.6%), North Shields (7.5%) and Killingworth (7.2%).
Moreover, the average rent in the North East rose by £10 per calendar month to hit £580. Rents in the region are now £28 greater than in March and have grown by 4% year-on-year.
Rising property prices now mean that the North East average rental yields have fallen by 0.1% to hit 4.3%.
Brexit boost
Leading property expert Ajay Jagota, founder and MD of North-East based lettings firm KIS, said, ‘if you listened to the way some people have been banging on in the media you’d be forgiven for expecting the Brexit vote to have had an apocalyptic impact on the North End and national housing market. But these figures prove just how wrong they were and to me that’s no surprise at all.[1]
‘I don’t believe there is a financial crisis around the corner and never have. Of course we saw some pretty unprecedented market volatility in the aftermath of the Brexit vote itself, but thankfully the markets have now calmed down and my prediction is from herein we can expect to see not just continuing growth but the region’s largest gains for some time,’ he continued.[1]
Brexit boost for North East properties
Uncertainty
Jagota notes that, ‘buyers and sellers traditionally put off big decisions when there is electoral uncertainty and that’s bound to have happened in recent months. But we still saw prices rising by more than seven percent in places like Tynemouth, North Shields and Killngworth. Imagine what’s possible now that uncertainty is over.’[1]
‘Of course we need to be aware of the impact a financial crisis could have on the regional housing market, unlikely as it looks to me. North East house prices only returned to their pre-financial crisis levels in 2014. But rising rents and stable returns are likely to have been a driving force behind this month’s growth, with anecdotal evidence continuing to suggest that the region is continuing to emerge as a destination of choice for national property investors.’
‘If this is the case, the region’s property prices would be more insulated from any financial shocks than last time around, even in the unlikely event they even existed,’ Jagota concluded.[1]
[1] http://www.propertyreporter.co.uk/property/brexit-vote-gives-boost-to-north-east-homes.html