Buy-to-let property investors from outside the region helped push North East house prices up by up to 20% during pandemic boom, estate agent says
The North East property market has boomed during lockdown, says one of the region’s most experienced estate agents.
Bill Kimmitt, whose firm Kimmitt and Roberts has offices in Seaham, Houghton and Peterlee, said the last year had seen a boom which was only now beginning to tail off.
"We expected lockdown would make the market difficult but it hasn’t,” he said.
“The market has ratcheted up and got progressively better. We peaked in April in terms of the number of sales agreed but May was still busy and June has been busy too.”
Bill believes two factors are at work, both a result of the pandemic.
He said: "During lockdown, people have been spending more time in the house and have, perhaps, realised it’s not as fit for purpose as they used to think. Either they are rattling around in it like peas in a drum, or it is too small, or they want a garden.
"The other thing is that people have been saving. Some of those who have saved money have invested it in their property but others have thought ‘We’ve got a bit of a deposit together now’."
The land registry’s index of price movements up to April 2021 shows that average prices in Sunderland have risen by 10 per cent, while in County Durham, the figure is 19.1 per cent.
"That is a huge jump, that is a massive jump,” said bill.
"And it is the same across the North East- the biggest increase in the region is Hartlepool, with 20.1 per cent.”
While the entire region has seen an increase in property value, the rise has not been uniform, with prices at the bottom of the end rising more steeply in percentage terms and sparking a new wave of interest for investors outside the region looking to buy to rent.
“What we have found is that some areas are more affected by the rise more than others,” said Bill.
"Northumberland had seen an average rise of 6.4 per cent, but houses somewhere like Horden were going for £25,000 and now they are going for £35,000 – that is a huge leap in percentage terms.
"Every area has seen growth – nowhere has been left behind – but it’s fair to say Seaham is experiencing a high rate of growth.
"From January 1 to June 16, 2020, our Seaham office sold 61 houses. In the same period in 2021, we sold 137, which is staggering.”
While the market is now cooling, it showed no signs of repeating the collapse of the early 2000s, said Bill.
“It is a cyclical thing,” he said.
"This has happened before for different reasons, but in this case, prices have risen directly as a result of the pandemic and what has happened to the economy as a result."
The upcoming end to the stamp duty holiday was also playing a minor part: “What we’re seeing right now is it is tailing off a little. There are less sales being agreed because there is less coming to the market,” said Bill.
“We saw a bubble burst in 2008 – what we are seeing now is a gradual deflation, which is more comfortable.”