HOUSE prices in the North East could soar in the next four years, a new report has claimed.
The latest BNP Paribas Real Estate’s (BNPPRE) Housing and The Economy report predicts the region’s market will come out of recessionary gloom by the end of the year.
And it forecasts an accumulated 29% rise in prices by the end of 2016. The quarterly report, put together with Professor Patrick Minford, a former economics adviser to Margaret Thatcher, makes for optimistic reading in the wake of recent housing market downturns.
It reveals the North East saw a marginal fall in house prices in 2011 of 1% but BNPPRE say it expects this to turn into a 2.5% increase by the end of this year.
The upturn will continue in 2013 with a price increase of 6.4%, the report predicts, reaching a cumulative increase of 29% by the end of 2016.
This translates to an annualised growth rate of 5.2% between 2012 and 2016.
The company puts the expected growth down to continued demand for housing combined with a lack of new developments and the need to refurbish existing stock. David Furniss, head of BNPPRE’s Newcastle office, said: “This return to growth should enable the North East’s housing market to re-establish stability which will enable development activity to increase from its current low base.
“There still remains the issue of the need to tackle the regeneration of large amounts of obsolete housing stock so that it doesn’t constrain local housing markets, but overall the outlook is positive for the North East market.â€
However the report suggests the market in the South will continue to outshine the North East.
BNPPRE predicts the UK will see 34% cumulative growth expected by 2016, an annualised growth rate of 6%, with growth this year forecast at 2.11%.
But the North East is set to outperform other areas in the north, including the North West and Yorkshire. Earlier this month The Journal told how house prices on the Northumberland coast have seen the second highest increase in a study of the country’s beauty spots.
A study by Lloyds TSB looked at house prices in England’s Areas of Outstanding Natural Beauty, using Land Registry sales figures for the 12 months to March.
It found that homes in the Northumberland Coast AONB – which stretches from Berwick to the Coquet estuary, taking in the likes of Seahouses, Bamburgh, Beadnell, Craster, Alnmouth and Warkworth – have increased in price by an average of 124% over the last decade.
The average is now said to be £185,376 – £102,557 more than 10 years ago.
But despite the rise, the Northumberland coast is still in the Top 10 of the cheapest beauty spots to live in nationally.
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