North East

Population growth, household incomes and commuter levels are driving property prices in the North East; the region is expecting a 4.48% average price increase by 2021.

This is the eighth highest increase across 12 UK regions.

Predicted Property Hotspots

The North East has one of the most affordable housing markets in the UK. For investors looking to the student rental market, it also has a number of leading universities, including Durham, Newcastle and Northumbria.

The largest upwards increase in average house prices is expected to occur in the following three districts:

  1. Stockton-on-Tees in County Durham
  2. Newcastle-upon-Tyne in Northumberland
  3. North Tyneside in Tyne and Wear

One of the key indicators expected to drive house price growth in the region is population growth. Newcastle has the highest level of expected population growth in the North East with slightly under 2.5% over the next five years. The market town of Stockton-on-Tees is expecting the second highest level of population growth, also set to increase by almost 2.5%.

The Metropolitan Borough of North Tyneside is predicted to enjoy the second largest increase in its workplace employment base over the next five years, with an increase of 0.7%. It also has the highest current employment rate of any North East local authority area and the second highest rate of expected average earnings growth in the region. This means average household incomes in the area are particularly strong, which will fuel the pressure for house price increases.

Another key predictor of medium and longer term job growth is the level of business start-up rates. Stockton-on-Tees has the highest level of business start-up rates per capita in the region, putting pressure on available housing. It also has the highest rate of recent growth in average earnings of any local authority in the North East region, pushing up prices.

Also important in predicting house prices over the next three to five years are in-commuting rates. Almost 60% of people who work in Newcastle commute in from neighbouring areas, which creates additional demand for housing in the area as they look to move closer to their workplace.

Investment Snapshot

  • Investors in the North East and Yorkshire & Humber own three properties on average. The average total value of a property portfolio in the region is £759,469
  • Across all UK respondents, more than one in 10 (12%) own property/properties in these regions. Half (48%) of these properties are being used for rental income
  • A third (34%) of local respondents are planning to buy new property/properties in the next three to five years.
  • They are modest about their investment prospects – investors in the North East expect the average value of the property / properties they own to increase by 6.9% over the next three to five years (compared to national average of 8.0%)

Key findings

The Barclays UK Property Predictor reveals the areas across the UK where house prices and rental incomes are expected to rise. The research uses factors such as rental trends, employment levels and commuter behaviours, as well as a survey of high net worth individuals to understand where and why they plan to buy in the future.

News and insight

Relevant financial news and information around how recent events and legislation could affect your wealth.