Posted on 22nd January 2016

Optimistic Outlook for North East

Nicola Neilson, Director at Latimer Hinks

Theres a lot of optimism around in the North East property market right now, with reports of rising prices and increased activity.

First-time buyers in the North East have made the region a Help-to-Buy hotspot. County Durham is in the top six areas for Help-to-Buy loan completions across the country, according to latest statistics which show 803 households benefitting from the scheme since its launch in 2013. Newcastle, Sunderland, Darlington and Stockton have also had high levels of people taking advantage of the loans.

Home builders are also reporting high levels of reservations and interest in their developments, with North East builder Cussins saying it has taken on new staff to field enquiries about its four new Northumberland developments. Barratts, meanwhile, has unveiled plans for nearly 2,000 new homes across 10 sites.

And, the property landscape is looking anything but bleak for private vendors too. While traditionally, sellers would wait until spring to put their property on to the market, the first weeks of the year have seen a surge of activity. A quick search of property portals reveals a flurry of "just added homes for sale.

Theres a common belief that there is no point in trying to sell your home at the start of the year during the colder months of January and February. But, spring tends to be when sales go through so it pays to start marketing your home or searching for your new one now. This time of year is when people make life-changing decisions whether they are ending failing relationships, downsizing or relocating because of new job opportunities; all reasons they will be looking for a new home.

Online property search engine Rightmove says it has seen modest price increases over December and January, but a flurry of smaller properties coming onto the market. While it puts this down to vendors deciding now is the right time to sell their homes in a bid to attract investors, this should also benefit first-time buyers looking to purchase starter homes.

Another sales driver is the Chancellors announcement that buy-to-let properties will be subject to an extra three per cent Stamp Duty from April. Analysts suggest that many investors have come into 2016 on a mission to purchase their next property or properties before the surcharge comes into force.

However, as we head further into the year, buy-to-let purchases may start to slow down, possibly leading to a fall or steadying up of prices for the sort of smaller homes usually snapped up by landlords.

There could, however, be bad news for tenants. While rents rose on average by just under 5% last year, in some parts of the country, the hike was 18%. Newcastle was one of the few places, along with Brighton and Edinburgh where rental increases surpassed those in London in percentage terms.

Whether buying or selling, the upcoming months certainly promise to be exciting times for the North East property market.