North East house prises rise 2.7% in a month

After four years of stagnation, house prices are on the up in the North East with estate agents reporting increased interest in properties

Demand from house buyers has increased
House prices have increased in the region by 2.7% in a month

Families are once more on the move - helping to boost North East house prices by 2.7% in a month.

After a stagnant four years the region’s estate agents are reporting increasing interest, while new figures from the Land Registry show the average cost of a home has risen by 1.3% year on year.

That means the average cost of a property is now £101,262, though there is an almost £40,000 difference between Newcastle, Northumberland and North Tyneside compared to County Durham.

“When I was told there were new figures I was prepared to wince but they’re pretty good actually,” said Richard Sayer, a founder of estate agents Rook Matthews Sayer.

“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.”

Mr Sayer said he hoped to now see “sustainable and sensible” growth - and a continuation of the downward trend for repossessions, which have fallen by more than half.

“People are talking about a bubble.

“But I’d want to reassure the North East that we’re not seeing that,” he said.

“There are two reasons for that. Firstly the number of houses being sold is only 55% to 60% of what it was six years ago - that’s not a boom. And secondly people are not spending more - there is no pressure forcing prices up.

“Also it is reassuring that it is all ends of the market at which we are seeing increased activity.

“Yes there are first-time buyers, many of whom have spent the last six years being told to be very afraid.

“But most of what was said would happen didn’t and so now they have saved a little, and with mum and dad saying they can help a bit, and banks being more open to lending, I think people are being more confident.

“That also applies to second or third-time buyers - people are deciding it’s time to get on with their lives.

“It’s all a very positive sign.”

The latest figures from the Land Registry show a 2.7% increase in house prices between August and September, a 1.3% increase in the last 12 months, and an average regional price of £101,262.

However on a local authority level, which averages sales from the last four months, the picture is less rosy.

Newcastle is the best performing area, with a 2% price rise year on year, but a 0.4% drop over the summer.

Gateshead (0.6%) and South Tyneside (0.8%) have also seen small annual increases, but in Sunderland (-0.9%), North Tyneside (-1.7%) and Durham (down 2.9%) values are heading in the opposite direction.

But Northumberland has both the highest average house price, at £122,032, and prices on the up - 1.5% up in the last month and 0.4% in 2013.

Yet all compare favourably to Hartlepool, where homes continue to plummet in price, down 9% to just £76,597.

Nationally, house values have risen 1.5% since August, with the average house price in England and Wales now £167,063 - up 3.4% on September 2012.

The greatest increase in its average property value over the last 12 months was in London, with a movement of 9.3%.

Wales saw the only decrease, down 1.7%.

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