House prices rise in North East but are still behind

Oct 3 2009 by Richard Fletcher, The Journal

HOUSE prices have risen in the North East but are still behind where they were 12 months ago.

Figures released by Nationwide Building Society showed house prices across the country increased over the last three months, including the North East.

Average house prices are now £125,385 in County Durham, £142,404 in Northumberland, and £141,236 in Tyne and Wear. Across the North as a whole, prices increased by 3.5% across July, August and September.

At a national level, house prices are only 3% lower than they were last year, but in County Durham and Northumberland prices still sit 11% lower than last year and Tyne and Wear 7% lower.

Property experts in the region last night predicted that prices in the region would catch up, saying the North tended to be slower to catch up on national trends.

Sam Gibson, from the Morpeth office of Strutt and Parker, said: “Here in the North East there is always a delay, a ripple factor. I don’t think our house prices increase as much as they do in the south, and so they didn’t fall as much.

“There is an improved tempo in the market place today. I’m a big believer in the urgency of now – it is without question a good time to buy a house. The catalyst and the reason for the increase has been partly because of fixed rate mortgage rates increasing. The great thing about the North East is that we have houses priced from very low to very high.

“I can’t say it any clearer – now is the time to buy.”

He also said the number of house purchases was up, and he was seeing a 20% increase in sales compared to last year.

Nationally, the average increase in prices over the last three months was 3.7%. In September alone they increased by 0.9% to £161,816. Although this is similar to last year, it is still 13.5% below their peak in October 2007.

Commentators are also unsure whether the sharp increase will continue at the same rate.

Mr Gibson said: “I don’t think we’re going to see a sharp increase in house prices. What we’re going to see is an increase in transactions. And if we do we will see confidence return to the marketplace.”

James Abbott from the Corbridge office of chartered surveyors Smiths Gore said: “Values in the North East didn’t drop last year by the national average. Although we haven’t necessarily seen the increase the national statistics show, values are roughly the same as last year.

“The region always lags behind, but equally there’s a smaller housing stock. It’s too soon to say it’s a wholesale recovery, but it’s certainly encouraging. For the North East I think there’s going to be a balanced market through to next spring and summer.”