North East house prices rise 4.2% according to Office for National Statistics

A rise in house prices across the North East suggests a lift in the economy according to estate agents

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Estate agents say the North East economy is on the up, after new statistics showed a 4.2% jump in house prices.

The latest figures from the Office for National Statistics show that year-on-year - to November 2013 - the average cost of a home in the region rose by almost £6,000.

And with renewed confidence, particularly among first-time buyers, property experts say they expect more and more families to be on the move in the coming 12 months.

Richard Sayer, of estate agents Rook Matthews Sayer, said that while he wasn’t sure that the North East housing market had picked up to the extent suggested by the latest figures, he was positive about the year ahead.

“In the last fortnight I’ve seen figures suggesting everything from prices being 5% up to 1.6% down,” he said. “And my belief is that prices have remained broadly flat for the past three years, but I expect them to rise this year.

“For six to nine months we’ve seen reports of prices rising sharply but I don’t think that’s true, and that’s good because it means homes in the region are still affordable.

“The earnings to house prices ratio, unlike somewhere like London where it’s completely out of whack, means that people in the North East can still both aspire to own a home and actually buy one.

“Prices have dipped from their peak in 2007, the market has bottomed out and now we are seeing that there’s an upturn in confidence, particularly among first-time buyers.

“But I don’t think we’ll get the extreme upturn that has been seen in the South East - we never did in the 1980s and 1990s. I think we’ll see moderate growth, which is welcome.”

The largest increase in the latest figures came in London, where prices are said to have risen by 11.6%. In the South East prices rose 4.5%, with a 4.4% jump in the West Midlands.

 

At the opposite end of the scale, the price of homes in the North West rose by just 0.6%.

However, none of that is likely to come as comfort to homeowners struggling to pay for their existing properties.

According to a new study by the charity Shelter, nearly one million people are estimated to have taken out a payday loan in the last year to help cover their rent or mortgage costs.

Shelter said that one in 50 people it surveyed said they had turned to quick credit services, which would equate to nearly 885,000 adults if the findings were projected across Britain. It also revealed that its helpline had dealt with just under 9,000 calls from people struggling to pay their rent or mortgage last year - a 32% increase on the total for 2012.

Liz Clare, a helpline adviser for Shelter, said: “Anyone at the school gates, in the supermarket or at work could be silently struggling.

“Times are tough, and we often hear from people who’ve reached crisis point because they haven’t felt able to ask for help earlier.”

The findings also come after lettings network LSL Property Services reported that a growing troubled minority of households are in severe arrears with their rent.

LSL, which owns chains Your Move and Reeds Rains and receivers Templeton LPA, estimated that around 67,000 households across England and Wales in the private rental sector are more than two months behind with their rent payments.

Russell Hamblin-Boone, chief executive of the Consumer Finance Association (CFA), which represents major short-term lenders, said: “While it is of some comfort that the figures haven’t increased since last year, there are still too many people using short-term loans to manage larger debt problems.

“We advise anyone who is regularly struggling to pay their rent or mortgage not to try and borrow their way out of trouble.”

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