In December 2015 The Chronicle reported that “The North East was likely to see the most modest price rises, with a predicted increase for 2016 of 3%, while London property was predicted to increase in value by 5%” and in September, we saw this prediction come true with North East rents going above £600pcm for the first time.
With uncertainty in the property market from the Brexit vote, many people don't know what to expect with rent prices, mortgages and buy-to-let properties. We have seen house prices rise and fall in 2016, however we saw average rents in the region rise above £600 for the first time – taking average rental yield to 4.6% in September.
Due to the fall in property prices throughout summer we have witnessed the average North East rental soar to 4.6% and it is continuing to rise by £10 per calendar month, reaching £610pcm. This means rents have risen by 7.4% from the £565 recorded in August 2016 – a rise of £45 a month but the question is, why?
One factor that is reportedly adding to the rise in rents is an increase in the student sector during the summer months. According to the latest report from Your Move, August rents in England and Wales have hit record highs due to a surge of student check-ins and the North East has certainly seen this.
Another factor that presumably has affected this soar in rental prices is the rising demand for properties. There is no question that renters do not want to see the rise, however, it is broadly in line with inflation and not to mention rents in our region remain considerably lower than the national average. So what’s been predicted for rental prices in these up and coming months?
According to the Royal Institute of Chartered Surveyors (RICS) house prices are expected to rise in the next three months and over the next year as buyer demand continues to rebound. On the other hand, it was good news for renters last month as we saw house rental prices fall, with the Daily Telegraph suggesting the market could be "running out of steam” due to a flood of new properties bought before the stamp duty increase in April. HomeLet added that "slowing growth in rents suggested that they may be hitting a threshold of affordability.”
If you're uncertain when to invest in a property or where and when is best to rent in the North East, we are here to advise you.
Come and see us in our Jesmond office or simply give us a call, where we can guide you to your perfect property!