North East renters face fees of at least £867 – rising to £1400 in Newcastle, £1230 in Durham City and £1131 in Morpeth – as the average North East tenancy deposit passes £850
North East house prices seem to be enjoying a spring surge – with average regional property values increasing by close to £2500 over the past four weeks.
Figures from sales and lettings firm KIS and deposit free renting firm Dlighted show North East house prices continuing to grow year-on-year – with the average home in the region now worth 2.8% more than at the end of March 2017, £4533 in cash terms.
March’s month-on-month average house price rise of 1.4% has added £2318 to the value of an average North East property, with price up 0.3% over the first three months of the year.
An average property in the region was valued at £168,000 at the end of March 2018 – compared to £165,682 at the end of February and £163,467 at the end of March 2017.
Property values in March 2018 grew in 80% of the areas surveyed, and rising by the most in Blyth (4.4%) and Killingworth (4.2%). Other above average performers include Houghton-le-Spring (3.4%) and Easington (3.1%)
Prices fell in slightly in Jarrow (0.8%), North Shields (-0.7%) Gateshead (-0.4%) and Tynemouth (-0.3%)
House prices in Killingworth and Easington have also performed strongest in percentage terms over the past 12 months, recording rises of 6.5% and 6% respectively.
Homes in Killingworth have also performed strongly in cash terms, with property values up £10242, followed by Tynemouth (£10,067) and Whitburn (£9180). Prices are up in every one of the 20 areas surveyed, albeit by only £215 in Washington and £275 in Jarrow.
Renters in the region are slightly better off than they were four weeks ago, with average rents falling from £582 to £578 – saving tenants £488 a year.
Easington remains the cheapest place to rent in the North East, with average rents of £364 half those found in Tynemouth (£844) – this month’s most expensive.
The North East continues to offer investors average rental yields of 4.2% – with landlords in Peterlee (6%) Newcastle (5.3%) and Gateshead (5.2%) continuing to see the best returns.
Under this month’s figures, the average tenancy deposit under the six week tenancy deposit cap proposed by the government’s draft Tenant’s Fees Bill would see North East renters facing move in fees of at least £867 – rising to £1400 in Newcastle, £1230 in Durham City and £1131 in Morpeth.
Ajay Jagota, Managing Director of KIS Group and Founder of Deposit-free renting firm Dlighted responded to the figures.
“These figures are clearly good news for North East homeowners, but it’s important to remember that they are good news for people hoping to become North East home owners too.
“Recent government figures showed UK wages rising by 2.6% a year, so with North East house prices rising at a slower rate this should mean more people able to take a first step on the property ladder.
“One of the most interesting things about this month’s figures is how the North East’s property hotspots are in many cases on the peripheries of major cities rather than within the major cities themselves. For example, prices are growing at a faster rate in Killingworth than in Newcastle, and growing at a faster rate in Houghton-le-Spring than in Sunderland.
“Saving money for renters is priority for policy makers, but these figures show once again that the real problem isn’t rents themselves or even the soon the be banned letting agent fees – it’s deposits, which cost the average North East tenant £867, and in places like Durham City, the best part of £1500.
“One emerging trend in 2018 is property prices growing but rents staying flat or even falling. Returns for investors are holding up, but could become squeezed as the year progresses, making it more imperative that landlords and letting agents consider steps they could be taking to find tenants faster. Deposit-free renting is something which definitely fits that category.”
KIS Group were named Letting Agent of the Year in 2013 after becoming the first property firm in the UK to abolish the tenancy deposit –replacing them with deposit replacement insurance.
Dlighted’s low cost deposit replacement insurance lowers the cost of renting for tenants while giving landlords the peace of mind of £600,000 of protection against property damage, £75,000 of cover for unpaid rent, and £50,000 of legal protection.
Dlighted is a deposit free renting alternative to a tenancy deposit scheme such as mydeposits, the Tenancy Deposit Service and the Deposit Protection scheme and deposit-free renting with Dlighted has been cited by 85% renters as their reason for choosing a particular letting agency.