The North East is on the verge of a rental market boom driven by Tees Valley investment
Nationwide buy-to-let specialist, Sequre Property Investment, believes the North East is on the verge of a rental market boom, with Tees Valley investment helping to drive tenant demand in the area.
The property market is on fire and nowhere more so than in the North West, where house prices have climbed 15.2% in the last year. This strong growth has been driven by a large level of property investment in the region with Manchester leading the way. A hub for businesses of all shapes and sizes, including the new home of the BBC, the city continues to see strong rental demand from both students and professionals.
However, the North East is fast becoming the focus for investment having previously sat in the shadows of its noisy neighbour. House prices in the region have climbed considerably in the last year, up 11.8% which is the second-highest rate of growth of all regions.
Nissan recently revealed its Sunderland car factory would create 400 jobs in the area, while the redevelopment of Teesside’s Redcar Steelworks is expected to bring a further 18,000 jobs, creating the UK’s largest Freeport in the process.
This incoming investment is already showing signs of stimulating the local property market according to figures released by Sequre Property Investment, which show rental demand in the North East is currently at 42%, higher than both the North West (40%) and England as a whole (39%).
Within the Tees Valley area, in particular, Darlington is home to the highest level of rental demand at 52%, with Redcar and Cleveland (46%) also seeing tenant demand for rental homes sit well above the regional average.
Hartlepool (27%) and Stockton on Tees (27%) are also home to a good level of tenant demand, while Middlesbrough is the least in demand at 21%, with all three providing potential for further growth.
Further analysis of the rental market by Sequre Property Investment also shows that these areas present a very good opportunity for buy-to-let investors due to varying levels of rental stock availability to meet current and growing demand.
Across both Redcar and Cleveland and Stockton on Tees, just 16% of all dwellings sit within the private rental sector, coming in below the national average (19%). Hartlepool is also home to a below-average level of rental homes at 18%, while Middlesbrough (20%) and Darlington (21%) sit marginally higher.
Sales Director at Sequre Property Investment, Daniel Jackson, commented:
“We’ve seen more and more investors within the buy-to-let space opt to invest outside of London due to the more favourable yields on offer and, as a result, the North West has been performing very well in recent years.
However, the focus certainly seems to be shifting to the North East as the next area of substantial growth and investors are eying the potential returns that may come due to substantial projects like the redevelopment of the Redcar Steelworks.
The firm foundations of a strong rental market are already in place across the Tees Valley area, but when you also factor in the potential shortage of existing stock in some areas, it presents a great opportunity for those considering an investment into the buy-to-let sector.”
