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)
Receive the latest insights on Newcastle's real estate market by downloading the investment case below.
Newcastle-upon-Tyne, commonly known as Newcastle, serves as the capital of North East England. The city's origins date back to 122 AD when it was established as a fort along Hadrian's Wall. Over the next two millennia, Newcastle experienced significant growth, with its population doubling during the 19th century, largely due to thriving shipbuilding and heavy engineering industries. 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 regeneration projects, helping to modernise Newcastle and align it with other major UK cities. As one of the fastest-growing cities in the UK, Newcastle has become an attractive destination for real estate investment. The presence of five major universities in and around the city contributes to a pool of over 100,000 students, providing businesses with a wealth of educated and talented young professionals. This younger demographic is drawn to the city's affordable rents and promising career opportunities, which in turn bolsters the rental market and makes Newcastle an appealing location for investors.
Newcastle-upon-Tyne, commonly known as Newcastle, serves as the capital of North East England. The city's origins date back to 122 AD when it was established as a fort along Hadrian's Wall. Over the next two millennia, Newcastle experienced significant growth, with its population doubling during the 19th century, largely due to thriving shipbuilding and heavy engineering industries.
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 regeneration projects, helping to modernise Newcastle and align it with other major UK cities.
As one of the fastest-growing cities in the UK, Newcastle has become an attractive destination for real estate investment. The presence of five major universities in and around the city contributes to a pool of over 100,000 students, providing businesses with a wealth of educated and talented young professionals. This younger demographic is drawn to the city's affordable rents and promising career opportunities, which in turn bolsters the rental market and makes Newcastle an appealing location for investors.
Newcastle boasts a thriving population of 1.6 million people within a 45-minute radius, making it the 8th most populous city in the UK. The city's current population of 307,710 is projected to grow by 5%, reaching 324,480 by 2035, surpassing the national average growth of 3%.
The city's property market has seen a 23% 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 investment opportunities in Newcastle's property market.
Newcastle's GVA has experienced a 28% increase since 2000, amounting to GBP9.4 billion as of 2021. Despite a slight dip in 2020 and 2021 due to the global pandemic, the city's economy has recovered and is expected to generate GBP11.8 billion in GVA annually by 2035.
Boasting a vibrant nightlife, a flourishing theatre scene, and impressive regeneration projects in progress, Newcastle remains an alluring destination for various demographics. The city offers an affordable living option for ambitious young professionals, boasting the best affordability ratio of 6.57 among the UK's top five cities. Newcastle's robust economy and well-developed public infrastructure have fueled population growth, elevating demand in both the rental and sales markets. This paves the way for outstanding investment opportunities, and here's why.
Newcastle's expanding population of well-educated graduates fuels an ever-growing demand for rental properties. 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 an incredibly attractive option for buy-to-let investments, as there is a vast pool of potential tenants. Newcastle's graduate retention rate, one of the highest in the UK, stands at around 30%, compared to many other northern cities with retention rates below 16%.
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 for 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 NorthEast region are expected to increase by an average of 7.4% by 2025.
Newcastle's continuous expansion has led to a growing demand for housing, 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. By 2030, a shortfall of at least 18,707 residential units is expected. As Newcastle's population is projected to grow by 12% (the number of households is predicted to increase from 122,424 in 2015 to 137,471 by 2030), the 2017 Gateshead & Newcastle upon Tyne House Market Assessment identified a need for over 1,000 new homes per year during the next 15 years.
Given the current property prices, now presents an opportune moment for investors to capitalise on the potential for increasing house values. Coupled with strong rental demand, Newcastle offers a highly dependable return on investment for property investors.
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 £50 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.
In the past two decades, Newcastle and the surrounding Tyneside region have experienced remarkable economic growth, with 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.
The presence of established firms alongside emerging start-ups in the tech, IT, and digital industries is projected to propel the region's economy by an additional 65%, reaching a value of £39.3 billion by 2035.
Newcastle's flourishing economy is further bolstered by tourism, supported by its international airport and extensive rail network. Passenger numbers at Newcastle airport are anticipated to grow to 9.4 million by 2035, contributing over £2 billion to the regional economy annually.
Newcastle Helix stands out as the most ambitious among the numerous ongoing regeneration projects in the city. With a £350 million investment, this project, regarded as the city's largest regeneration effort in decades, aims to create 4,000 new jobs and inject £960 million into the local economy upon completion. Helix will set a new standard for future property developments, 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 £100 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.
Although Newcastle's house prices are more affordable compared to other major UK cities, they are not declining. In fact, the housing supply struggles to meet demand. Over the past decade, an average of 715 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 18,707 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 13.5%.
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.
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 4-5% and ongoing cost of living and housing shortages, 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, 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.
Factors such as budget, property type, and investment goals come into play. However, popular areas 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 long-term investment objectives.