Newcastle Homeowners Have Turned to the Rental Market to Cash in by £11,900 Each
Should you sell or should you buy in this most interesting Newcastle property market?
I have calculated that at least 345 Newcastle house sellers have rented a home to break their house chain in the last 12 months, although at a cost as they face paying many thousands of pounds in rent.
There are a number of reasons behind this. One is because they cannot find another Newcastle property to buy amidst a continuing shortage of new Newcastle properties coming to the market. Although, there are others who have achieved such a high price for their home they have decided to cash in and are (hopefully for them) waiting for the Newcastle property market drop?
Or will it drop? (More on that later).
Those selling their home have seen the …
average Newcastle home rise in value in the
last 12 months by £11,900.
Yet, if they have had to go into private renting, they have paid for that privilege in the rent they have had to pay.
The average cost of a six-month rental agreement in Newcastle is £4,091, meaning accidental Newcastle tenants have pumped £1,411,364 into the Newcastle rental market in the last 12 months.
The unevenness between the number of properties for sale and demand for them is at its widest since the early 2000’s. Whilst we have seen a slight improvement in the number of properties for sale in Newcastle, there are still …
37% fewer homes up for sale today in Newcastle,
compared to August last year.
This serious shortage of Newcastle property for sale is discouraging some hesitant Newcastle homeowners from putting their property on to the housing market, anxious they will not be able to find their next home and will be left renting.
Yet some savvy Newcastle homeowners are moving into a rented property as a way to navigate the shortage of properties to buy. If you have someone offering you top dollar for your Newcastle home, whilst you will have the hassle of two moves, the increase in value of your Newcastle home will more than offset the rent.
Also, when you come to buy your next Newcastle home, you will be chain free and in pole position to buy your ‘forever home’, rather than being overlooked for the home because you are sold stc and burdened with a chain.
Yet this trend has made life tougher for long-term Newcastle tenants.
On average there were normally 1,850 to 2,220 properties available to rent in Newcastle on Rightmove at any one time (pre-pandemic), today there are only 927 available.
To give you an idea of how this has affected the Newcastle rental market, with heightened demand and lower supply, demand for rental properties has grown to such an extent …
the average rent in Newcastle has grown from £682 per month
a year ago to £750 per month today.
Tenants are suffering from less choice and higher rents in the Newcastle property rental market, with few indications it’s going to significantly ease on the run up to Christmas.
So, what is going to happen to the Newcastle property market?
Well, those of you that follow me know I regularly write about the Newcastle property market in my property blog. If you would like some recent articles I have written about the future of the local property, either drop me a line and I will send you some links to those posts, send me a DM or contact me by telephone.
In the meantime, please do share your thoughts on the matter in the comments.