New analysis has revealed that that average rents in the North East have gone above the £600 mark for the first time.
The report from sales and lettings firm KIS also shows that the typical rental yield in the area is now a record 4.6%.
In addition, further data from the report indicates that a summer slowdown in house prices in the North East saw values fall by an average of 2.3% per month in July and August.
This means that the average North East property is now valued at £157,438. Property values slipped in all of the twenty areas surveyed, with the exception of Whitburn.
Areas that saw the most sharp declines were Durham City, where prices fell by 4.2%, Houghton-le-Spring (3.7%) and Darlington (3.5%).
The regional fall in property prices is in conflict with a rise of 5.2% recorded at the same period last year. In 2015, prices actually increased by 3.8% in July and by 1.8% in August. In addition, the typical house price in the North East is presently 3.8% lower than in August of 2015.
North East rents continued to increase by around £10 pcm across the summer, reaching £610. This is the first time rents have exceeded £600 since records began. What’s more, rents have increased by 7.4% from the £565 recorded since the beginning of August.
Blyth is still the cheapest place to rent, with typical costs of £397 pcm. At the other end of the scale, Tynemouth is most expensive, with rents of £1125 per month.
The regions ‘Buy-to-Let capital’ is Peterelee, where investors can expect rental yields of 6.1%. Other strong performers are Gateshead and Killingworth (5.9%) and Sunderland (5.3%).
Falling property prices have seen the average North East rental return rise to 4.6% over the course of the summer months.
North East rents rise over £600pcm
Ajay Jagota, founder and MD of KIS, observed, ‘the current strong performance of the North East rental market is no surprise to us here at KIS where we saw a 15% year-on-year rise in transactions in July, with August continuing that trend. There’s a hypothesis to be made that the Brexit vote has strengthened the rental sector while slowing growth in residential sales as people put off making long-term decisions like buying houses, but it’s important to remember that regional house prices are essentially unchanged since the vote, a clear sign that some of the more apocalyptic predictions have not even come close to coming true.’
‘There can be no question that rising demand for properties has taken average rents above £600 a month for the first time. Obviously renters will not want to see this, but this rise is broadly in line with inflation and of course rents in our region remain close to 20% lower than the national average. From a landlords perspective there couldn’t be a better time to invest with strong rental demand and rental yields in the North East at an all-time high and property values dipping slightly following a period of consistent capital