The North East property market has been somewhat sluggish in its recovery in comparison to southern regions. But, recent analysis is pointing to signs of a return to growth.
Latest figures show that the North East has enjoyed the fastest rising property prices across the country. The Land Registry statistics reveal a 1.8% rise in the year to the end of May.
Predictions that property prices would rise once we entered a period of greater stability following the General Election have proved correct.
According to new reports from Rightmove, the price of property coming to market is at an all-time high, up by 3% on average across the country. While many would-be buyers were unwilling to make a move until they knew exactly how a new Governments economic policies would affect their own bank balances, the housing market is now back on track.
The aftermath of the previous General Election resulted in more properties coming onto the market but analysts say that hasnt happened to the same extent this time round. As a result, demand from buyers is outstripping supply, pushing prices up.
Despite that, there have now been four successive rises in mortgage approvals, month-on-month.
According to latest British Bankers Association (BBA) lending figures, the number of people approved for new mortgages in May rose to the highest levels since March last year, providing fresh evidence that confidence in the housing market is returning.
Collectively, the nation now owes £36bn in loans, with the number of mortgage approvals expected to continue to grow.
That is despite tough new lending rules introduced last year which ask potential borrowers to account for more of their spending, including revealing how much they regularly splash out on the likes of socialising, holidays and clothes.
Notwithstanding stringent criteria, fierce competition among high street lenders means there are some good mortgage deals available.
The Mortgage Advice Bureau says average deposits have risen to a post-recession peak of £72,302. But those figures will be skewed by London statistics.
In reality, lenders are starting to offer deals to borrowers with lower deposits and lower interest rates in a bid to win over borrowers with their products.
While securing a mortgage with a 5% deposit has proved tricky in recent years, borrowers are now being offered better deals, with interest rates of less than 5%. For those who have saved up a 25% deposit, initial rates as low as 1.14% are on offer.
So, despite rising prices, good value mortgage deals could well tempt prospective buyers to get onto the housing ladder now, particularly if they can do so with a smaller deposit than they may have thought was necessary.
It looks like were set for a very buoyant North East property market in the latter half of 2015.
Martin Williamson is Head of Residential Property at Latimer Hinks Solicitors in Darlington. Latimer Hinks has a team of around 40 people serving private and corporate clients. For further information: www.latimerhinks.co.uk or call 01325 341500.
Please note: This article is intended as guidance only and does not constitute advice, financial or otherwise.
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