Newcastle house prices increased more than North East average in August

House prices increased by 2.9% – more than the average for the North East – in Newcastle in August, new figures show.

The rise contributes to the longer-term trend, which has seen property prices in the area grow by 11.1% over the last year.

The average Newcastle house price in August was £195,610, Land Registry figures show – a 2.9% increase on July.

Over the month, the picture was different to that across the North East, where prices increased 0.9%, and Newcastle was above the 0.9% rise for the UK as a whole.

Over the last year, the average sale price of property in Newcastle rose by £20,000 – putting the area sixth among the North East’s 12 local authorities with price data for annual growth.

The highest annual growth in the region was in North Tyneside, where property prices increased on average by 16%, to £208,000. At the other end of the scale, properties in South Tyneside gained 4.6% in value, giving an average price of £155,000.

An imbalance between supply and demand for properties saw house prices climb across the UK throughout the pandemic.

But experts say expectations have changed significantly in recent weeks amid mortgage rate rises, with the likelihood of a dampening effect on house price growth.

According to figures from Moneyfacts.co.uk On Wednesday, the average two-year fixed-rate mortgage on the market has a rate of 6.52% and the average five-year fix is at 6.36%.

There are around 900 fewer mortgage products available than there were on the day of the mini-budget in September.

Chris Druce, senior research analyst at Knight Frank, said: “Current activity in the housing market is being shaped by mortgage status.

“Those that can are pushing on and securing deals ahead of further increases, while others have paused plans to digest events.

“With affordability set to be a growing barrier for many homebuyers in the coming months, we forecast house price growth will slow from here, with price falls in 2023.”

First steps on the property ladder

First-time buyers in Newcastle spent an average of £169,000 on their property – £16,000 more than a year ago, and £30,000 more than in August 2017.

By comparison, former owner-occupiers paid £223,000 on average in August – 32% more than first-time buyers.

Property types

Owners of terraced houses saw the biggest rise in property prices in Newcastle in August – they increased 3.1%, to £190,630 on average. Over the last year, prices rose by 10.2%.

Among other types of property:

Detached: up 3% monthly; up 16.8% annually; £396,490 averageSemi-detached: up 2.8% monthly; up 11.4% annually; £227,651 averageFlats: up 2.7% monthly; up 8% annually; £127,011 average

How do property prices in Newcastle compare?

Buyers paid 19% more than the average price in the North East (£164,000) in August for a property in Newcastle. Across the North East, property prices are higher than those across the UK, where the average cost £296,000.

The most expensive properties in the North East were in North Tyneside – £208,000 on average, and 7% more than in Newcastle. North Tyneside properties cost 1.6 times as much as homes in County Durham (£130,000 average), at the other end of the scale.

The highest property prices across the UK were in Kensington and Chelsea.

Factfile

Average property price in August

Newcastle: £195,610The North East:£164,395UK: £295,903

Annual growth to August

Newcastle: +11.1%The North East: +14.3%UK: +13.6%

Highest and lowest annual growth in the North East

North Tyneside: +16%South Tyneside: +4.6%