Are house prices dropping in Newcastle?

While house prices are among the most affordable in Newcastle compared to the other major cities in the UK, they aren’t showing signs of dropping. The opposite is true as the housing supply is failing to meet the demand. Over the past 10 years, an average of 715 units have been added to the housing stock each year. This is well below the annual housing requirement of roughly 1,128 units. Taking the previous backlog into account, an undersupply of at least 18,707 housing units is expected by 2030. This economic fundamental is the basis for long term growth despite economic headwinds that may cause price fluctuations. Over the next 5 years, prices are expected to rise 13.5%.

What are the up-and-coming areas in Newcastle?

Due to recent regeneration projects, Newcastle has many new tourist hotspots that draw interest to the city. The Quayside is an attractive spot by the waterfront with Gateshead just across the River Tyne where cultural venues such as the Sage Gateshead music venue and the BALTIC Centre for Contemporary Art. Newcastle’s Helix project also presents an exciting place for businesses to set up their base with modern residential units offering a revolutionary way of living with smart home systems and renewable energy. Newcastle’s city centre continues to bring in the most interest. Fenham, only two miles from the city centre, offers great opportunities for buy-to-let investors. With the University of Newcastle campus a stone’s throw away, it has much interest for students and many graduates choose to rent in the area. As an option for prime real estate, Jesmond is a more affluent area with a popular nightlife within the suburb. House prices are on the higher end but rental demand in the area promises a future return.

What are the average rental yields in Newcastle?

According to property.xyz, the average long-let yield in the city centre is 7.9%. Outside the city centre, average rent prices are lower and so reduce the rental yield. As the areas in Newcastle vary in price, it’s not advisable to use an average rental yield to judge how profitable Newcastle can be for buy-to-let. We offer free consultations so that we can make a more accurate study on which areas are best to target for your long-term investment plans.

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Newcastle: The Friendliest City In The UK

• Home to 5 Major Universities With Over 100,000 Students

• High (55%) Graduate Retention Rate

• Named the “Best UK City for Vibes, Style and Food” (2023)

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NEWCASTLE PROPERTY FOR SALE

In recent years, Newcastle has successfully transitioned into a hub for finance firms, tech start-ups, and digital industries. The city is now home to more than 50,000 diverse businesses, with a growing emphasis on knowledge-intensive sectors. This economic transformation has led to an evolving skyline and numerous opportunities for Newcastle property investment, helping to modernise Newcastle and align it with other major UK cities.

As one of the fastest-growing cities in the UK, Newcastle property investment has become an attractive opportunity. The presence of five major universities in and around the city contributes to a pool of over 100,000 students, providing landlords with plenty of potential tenants. This younger age group is attracted to the city's prestigious educational establishments and potential career prospects, which in turn bolsters the rental market and makes Newcastle property for sale appealing to investors.

Newcastle in a snapshot

Population

Newcastle has the largest population in the North East of England and is the 8th most populous city in England. The population of Newcastle is projected to reach 329,649 by 1 July 2024, an increase of 17.6% since 2011.

Housing Market

The city's property market has seen a 30% growth in prices since 2010, with a further increase of 13.5% anticipated over the next five years. This upward trend demonstrates the potential for lucrative opportunities for Newcastle property investment.

Economy

According to Oxford Economics, Newcastle's GVA has experienced a 38% increase since 2010, reaching GBP9.8 million in 2023. Despite a slight dip in 2020 and 2021 due to the global pandemic, the city's economy has recovered and is expected to generate GBP10.8 billion in GVA by 2030.

FIVE REASONS TO INVEST IN PROPERTY IN NEWCASTLE

Boasting a vibrant nightlife, a flourishing theatre scene, and impressive regeneration projects in progress, the city offers an affordable living option for ambitious young professionals looking for Newcastle property for sale, boasting the fifth-best affordability ratio of 5.7 out of all cities ranked in England and Wales in 2022. Newcastle's robust economy and well-developed public infrastructure have fuelled population growth, elevating demand in both the rental and sales markets. This paves the way for outstanding Newcastle property investment opportunities, and here's why.

Soaring Rental Demand

Newcastle's expanding population of well-educated graduates fuels an ever-growing demand for Newcastle property for sale. This demand shows no signs of slowing down. While rental rates in Newcastle remain among the most affordable in major UK cities, the persistent demand makes the city a desirable option for buy-to-let Newcastle property investments, as there is a vast pool of potential tenants. According to a recent study from Liberty Living, Newcastle's graduate retention rate stands at 36% and ranks 8th among UK cities.

This abundant supply of educated young residents has attracted tech companies, capitalising on the highly skilled workforce and steadily increasing their presence in Newcastle. The city's decreasing unemployment rate further enhances its appeal to young professionals seeking career opportunities.

Given the growing disparity between rental property demand and supply in Newcastle, combined with a rise in average household income, rent prices in the North East region increased by 5.7% in the year to Feb 2024.

Lucrative Housing Market

Newcastle's continuous expansion has led to a growing demand for Newcastle property for sale, which has been challenging for the market to meet. Despite the launch of numerous development projects, the city is still grappling with a consistent lack of available housing. As Newcastle's population is projected to grow by 4.8% by 2030 (the number of households is projected to increase from 127,560 to 132,420), a shortfall of at least 20,500 residential units is expected over the same period.

With the current property prices of Newcastle real estate, investors have a prime opportunity to capitalise on the potential for rising house values. Paired with robust rental demand, investing in Newcastle property offers a reliable return on investment.

Hub of Innovation

Newcastle is fast emerging as a hub for innovation within the digital and creative industries in the UK. The city's commitment to digital advancement has led to its selection as a Gigabit City project site. This initiative establishes a secure, high-capacity fibre network connecting mainland Europe and the USA, enhancing global connectivity. City Fibre's GBP50 million full-fibre plan will further elevate Newcastle's status as one of the most connected cities in the UK.

The digital entertainment sector in Newcastle is also experiencing significant growth. The city boasts one of the largest concentrations of game development companies outside London. With a talented pool of developers and designers, Newcastle serves as an ideal location for digital creatives, injecting fresh momentum into the city's economy. Thus creating a larger need for those looking for Newcastle property for sale.

Booming Economic Growth

In the past two decades, Newcastle and the surrounding Tyneside region have experienced remarkable economic growth, with its GDP increasing by 114% from 2000 to 2021.

GDP increasing by 102% since 2000. The area is home to more than 50,000 registered businesses, including global giants such as Siemens, Sage PLC, Nestlé, Procter & Gamble, Norton Rose Fulbright, Virgin Money, HMRC, Barclays, Ubisoft, and Concentrix.

Established and emerging businesses in the professional, scientific and tech industries are expected to drive the region's economy by 14% from now to 2030, with a value of GBP967.45 million according to Oxford Economics. Newcastle's information and communications sector is forecast to see growth of more than 12% over the next five years, with the technology sector set to grow by more than 8% over the same period.

Newcastle's flourishing economy is further bolstered by tourism, supported by its international airport and extensive rail network. Newcastle is expected to attract one million visitors annually, create 2,000 jobs and generate a GBP70 million growth in the regional economy.

Newcastle Regeneration

Newcastle Helix stands out as the most ambitious among the numerous ongoing regeneration projects in the city. With a GBP350 million investment, this project, regarded as the city's largest regeneration effort in decades, aims to create 4,000 new jobs and inject GBP960 million into the local economy upon completion. Helix will set a new standard for future Newcastle property investments, featuring 450 solar-powered homes, some of which incorporate smart technology.

Besides Helix, other exciting regeneration projects are transforming the cityscape. Giants on the Quayside, a GBP100 million waterfront development spanning over 322,000 sq ft, includes Europe's largest observation wheel. Upon completion, it is expected to draw more than 260,000 visitors to Newcastle annually. Meanwhile, the Brett Wharf development in Gateshead plans to introduce new rental apartments and commercial spaces, including offices, shops, and restaurants.

See our latest Newcastle opportunity

Our Track Record For Newcastle Investment Properties

Introducing our latest venture in Newcastle, Arc Avenue, also known as Ochre Yards by Mandale. This Grade II Listed conversion development in Gateshead has been awarded the prestigious title of the best residential renovation/redevelopment in the UK at the UK Property Awards. Fully occupied, the development has generated impressive growth and returns for all our investors. Upon completion in 2022, it surpassed expectations with an average rent reaching 128.37% of the forecasted cashflow rent and an average yield of 7.48%.

Frequently Asked Questions About Newcastle Investment Properties

Is The Price Of Newcastle Property For Sale Declining?

Although Newcastle property for sale is more affordable compared to other major UK cities, prices are not declining. In fact, the housing supply struggles to meet demand. Over the past decade, an average of 815 housing units have been added each year, falling short of the annual requirement of approximately 1,128 units. Considering the existing backlog, an undersupply of at least 20,500 housing units is projected by 2030. This fundamental economic factor supports long-term growth, even amidst potential price fluctuations. Over the next five years, prices are expected to rise by 11.2%.

Which Areas In Newcastle Are Considered Up-And-Coming?

Newcastle has witnessed several regeneration projects, creating new tourist hotspots and boosting the city's appeal. The Quayside, a vibrant waterfront area, and Gateshead, located across the River Tyne, are home to cultural venues such as the Sage Gateshead music venue and the BALTIC Centre for Contemporary Art.

Newcastle's city centre remains a popular area, and Fenham, just two miles away, presents excellent opportunities for buy-to-let investors. With the University of Newcastle campus nearby, the area attracts students and graduates alike.

For prime real estate, Jesmond is a more upscale area, boasting a lively nightlife scene. Although house prices are higher, the strong rental demand in the area promises strong future returns.

What Is The Average Rental Yields In Newcastle?

As per PropertyData.co.uk, the North of the UK is expected to see the highest market value growth in 2023. With mortgage rates likely returning to 5% and ongoing cost of living and shortages in Newcastle property for sale. Newcastle, along with Manchester, Leeds, Liverpool, Bradford, and Sheffield, should maintain stable prices and rental yields above the interest rate in the coming years.

Given the varying prices across Newcastle property for sale, however, relying on an average rental yield to assess the city's profitability for buy-to-let investments is not advisable. We provide free consultations to help you determine the most suitable areas for your long-term investment goals.

Get in touch with us today to book a free consultation.

What Is The Best Suburb To Invest In Newcastle?

Factors such as budget, property type, and investment goals come into play. However, popular areas in Newcastle with strong rental demand and potential for growth include Gateshead, Jesmond, Fenham, and Heaton.

Gateshead is an up-and-coming area just South of the city, where price growth is forecast to significantly increase.
Jesmond is an upscale area with higher house prices but offers a lively nightlife scene and future returns.
Fenham, close to the city centre and the University of Newcastle campus, attracts students and graduates, making it ideal for buy-to-let investors.
Finally, Heaton is a more affordable suburb with a diverse population, making it an attractive option for different types of investors.

Our complimentary consultations are designed to assist you in identifying the ideal locations for your Newcastle property investments or to identify Newcastle property for sale.