House prices in North East predicted to rise in five years

Property forecasters say house prices in the North East could increase by 17.6% by 2018

The demand for housing the North East has risen
Houses for sale on a street

House prices in the North East could rise by 17.6% in the next five years, property forecasters have predicted.

Estate agents Savills said the average house price in some areas will jump by 2018.

Yet the North East will continue to lag behind other parts of England, with average house prices expected to rise by 32% in the South East and 31% in the East. A 24% increase is forecast in London.

Lucia Cook, of Savills, said concerns of a housing bubble were misplaced.

She said: “We see no evidence of an imminent housing bubble and think it is an unlikely prospect.”

The prediction follows a recent report which showed that house prices in the North East had increased by 2.7% in a month.

After a stagnant four years, the region’s estate agents reported rising interest, while figures from the Land Registry showed the average cost of a home has risen by 1.3% year on year.

Richard Sayer, a founder of estate agents Rook Matthews Sayer, previously said: “We’ve had statistics quoted for at least the last nine months saying prices are rising by 10%, 11% or even 12% and then you look down your street and think, ‘No they haven’t, not in the North East’.

“Prices dropped from 2007 to 2009 by about 20% - but I think we can all agree they were too high - then they have been flat and steady for the last four years.

“But there’s been no collapse or calamity, jobs have largely remained, employment is picking up and the economy is turning faster again. And what that means in real terms for houses is that properties are worth roughly what they were in 2004 - which is not nearly as scary.

“And I’m overjoyed to see an annual change of 1.3%, which is pretty much what we’ve experienced.”

Meanwhile, the North East managing director for a leading housebuilder has welcomed the company’s interim management statement, published yesterday, which sees visitors to new developments across the country increase by 20% ahead of last year and weekly private sales increase 45% ahead of last year since July 2013.

John Eynon, of Persimmon Homes North East, said improvements are being seen month on month, as more people gain confidence in the economy and take advantage of new schemes.

He said: “The introduction of the Government-sponsored Help to Buy equity loan scheme in April 2013, which is only available to buyers of new homes, has proved particularly attractive, with over 3,000 new homes sold by Persimmon under this scheme.

“It’s not just first-time buyers who are taking advantage of the scheme, but also those looking to either move up the property ladder or simply cut the cost of outgoings by buying a property through our scheme.”

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