Thursday 29 April 2021
When you think of the key cities to invest in the UK, Newcastle often doesn’t come to mind straight away, but it really should and here’s why…
Famous for its industrial heritage and eponymous brown ale, the city has undergone powerful transformations since it began life as a Roman fort on Hadrian’s Wall in 122AD. The major export and icon of Newcastle is the famous Newcastle Brown Ale, whilst Newcastle United Football Club also contributes to the city’s unique personality. Newcastle is also known amongst tourists and residents for the city’s iconic bridges, Angel of the North, The Sage and even the Baltic Contemporary Museum of Art.
This article aims to educate you on the city and all it has to offer you as a property investor.
Newcastle’s property investment market has had a more steady growth than say Manchester, making it a more affordable city with more room for potential growth to invest in. Experienced investors understand it is quite often the case to try and invest ahead of the trend.
House Price Growth in Newcastle Makes A Clear Case For Property Investment
The average house prices in NE1, Newcastle city centre, are currently £128k for a 1-bed property and £175k for a 2-bed property (Property Data April 2021). You can appreciate these are very affordable prices to enter the buy-to-let market in comparison to other major cities. With more investors entering the market at these lower prices it means that Northern cities are seeing a faster rate of investment than places such as London and surrounding areas.
Growth in the last 12 months alone is up 8.89% in Newcastle, meaning that if you invested in Newcastle 12 months ago the average property would be worth an additional £15,964 (Zoopla April 2021)!
Additionally, recent projections from Savills shows that in the next 5 years there’s predicted to be a 20.5% growth in property prices in the North East (Savills March 2021).
The average rental prices are coming out as £707 for a 1-bed and £918 for a 2-bed. This makes yields around 6-6.3% on average. This is one of the higher yields achieved in the major cities – a great return on your money.
The best is also yet to come, with major regeneration projects planned and currently taking place.
Pilgrim Street is a key project within the city with hundreds of millions of pounds being invested in new retail and leisure projects.
Other significant regeneration projects taking place include Newcastle Helix, a £350m multi-phase regeneration scheme to create a local innovation cluster generating thousands of new high-tech jobs.
There is also the Stephenson Quarter, a £200m multi-phase scheme which has already produced a new university technical college, a four-star hotel and a collection of high-quality office buildings. Newcastle City Council notes that it is “set to become one of the leading office and knowledge districts in the North East”.
Employment growth for the city is projected to be +14,000 jobs by 2030 (Source: Savills Spotlight 2019) with major employers located in Newcastle. Nissan Motor Manufacturing UK, Sage Group HQ, Tetley Tea Factory, Nestle, Virgin Money PLC, Deloitte are just to name a few.
Additionally, the new regeneration schemes on Pilgrim Street alone are expected to generate around 4,000 new jobs over the next ten years. This doesn’t take into account the many other regeneration programmes and what they will bring to the city.
In total, Newcastle contributes over £13 billion towards the United Kingdom’s GVA. Newcastle’s largest shopping centre Eldon Square attracts over 36 million visitors yearly, making it the 5th busiest shopping centre in the UK.
It is also home to Newcastle United, the world-famous sports team.
Students are a huge part of the city with two universities, Newcastle and Northumbria, bringing more than 50,000 students to this vibrant city. Newcastle University is part of the Russell Group of elite universities.
Investing in Newcastle today is comparable to investing in Manchester or Liverpool 10 years ago, so are you ready to get ahead of the property investment trend?