Newcastle property market overview for investors

Although it’s the largest city in North-East England, Newcastle is still very much an undiscovered property investment gem. But thanks to its recent growth, the Newcastle property market has started gaining popularity. The city’s affordability and growing rental yields are bound to attract new and seasoned investors alike.

Not many people know that Newcastle ranks 8th in the UK in terms of population and 1st in last year’s most loved city poll. Its residents praise the culture, nightlife, and architecture of the city among other things. Most importantly, they say it’s one of the friendliest and most vibrant places in the UK. With so much going on, let’s take a look at the Newcastle property market and the investment opportunities it offers.

Is the value of property expected to rise?

Up until 10-15 years ago, property purchases were largely focused in London and South England. Consequentially, the high demand drove prices up and investors quickly started looking for opportunities elsewhere. Since then, we’ve seen an upwards trend in investment in the north and other less traditionally popular areas. Regional hotspots like Newcastle have attracted investors with their rising rental yields and lower prices.

With house prices up by 10.7% in 2021, the North East has already become a hotspot for property investors. Even so, it’s still the cheapest area to buy a property in the UK, with average prices as low as £155K across the region. The average property value in Newcastle itself is not much higher at £186K. The entry-level market opportunities make the Newcastle property market attractive for first-time investors. Moreover, more and more renters are moving to the area and boosting market competition as well as rental yields.

Rental demand in the Newcastle property market

According to CBRE’s 5-year forecast, rent is expected to increase by 7.4% in the North East over the next 5 years. The average monthly rent in Newcastle in May 2022 was £961 with Rightmove registering a 79% increase in rental competition this year.

Moreover, the £260m Newcastle Gateshead Quay regeneration will bring new professionals to the area in the coming years. And, if Newcastle Football Club’s recent acquisition follows the path of other high-profile club takeovers, property prices could climb by 15% over the next 3 years. For example, when Joshua Harris took over Crystal Palace in 2015, house prices in the area climbed by 16%.

Does Newcastle have a large student population?

Newcastle is home to two popular universities – Newcastle University and the University of Northumbria. Combined, they drive about 50,000 students to the city, and applications are only set to grow. Although some students live in purpose-built accommodations initially, they usually move to residential housing later on. Investing in a buy-to-let property that is tailored to students can be a great opportunity in a city like Newcastle. There is already a high demand for renting and new students arrive every year.

Another key benefit is Newcastle’s student retention rate. With 36% of students deciding to stay in the city after they graduate, the area ranks 8th in the UK for student retention. It might not seem like much, but it’s only 11% lower than that of London. Additionally, Newcastle’s universities attract a lot of international students. Foreign students usually have larger budgets and are more likely to opt for a luxury rental. All this data is very optimistic for those interested in the Newcastle property market.

Is the Newcastle property market worth investing in?

As with many things, it entirely depends on the details of the investment itself. Any region can have great deals as well as bad ones, especially if you don’t know where to look. Depending on your demands and budget, a property deal sourcer like Closefield Property can offer advice on the best options. Moreover, we deliver an in-depth analysis of the deals we source for our clients. All our deals pass a 50-point list of due diligence checks before they reach the eyes of investors.

There are many options for property investors, including finding a property themselves. Our recommendation, however, is to outsource this difficult and time-consuming task. As professional property sources, we leverage our vast industry knowledge and connections to find the best deals. At Closefield Property, we’ve helped many investors on their journey up the property ladder. If you’d like to become one of them, you can book a call or email us with more information about what you’re looking for.