Newcastle house prices continue upward trend amidst surging mortgage searches

According to yesterday’s UK House Price Index from the Office for National Statistics, the average house price in Newcastle was £193,000 in May 2024, up 4.6% from May 2023. Across the North East, the average house price rose 3.7% in the year to May 2024. 

Sanjay Pugal, director and head of real estate and construction at RSM in the North East and Yorkshire, comments: 'House prices in Newcastle rose 4.6% in the year to May, continuing the upward trend of previous months and indicating optimism amongst buyers in the region. The housing market is continuing to make steady progress in the North East, as interest rates and inflation continue to ease. This gentle upward trend in house prices is likely to continue, especially as Northern cities, including Newcastle, now account for almost 11% of all purchase mortgage search activity, a 67% increase from the previous year.

'This surge, alongside a fall in house prices in London and the South East, suggests a shift in consumer trends, with more households looking to the North for more affordable, better quality housing options, including those looking to get on the ladder for the first time. However, challenges remain, as property transactions are still historically low, and with average UK private rent costs increasing by 8.7% in the 12 months to May, the housing market’s recovery is being held back by cost pressures on households.'

He added: 'However, the new government has set out its intentions to build 1.5m new homes in the next five years, with focus on affordable housing, helping first-time buyers and restoring mandatory housing targets. This should relieve existing supply and demand issues, and reduce the number of households trapped in the rental market. For the North East, developments are already underway, but there is an obvious planning lag which is holding back real growth in the region, highlighting the need for government to kickstart reforming the planning system.'