North East England on the verge of a rental market boom

Nationwide buy-to-let specialist Sequre Property Investment, believes the North East is on the verge of a rental market boom, with investment in the Tees Valley helping to drive tenant demand in the area.

The North East is fast becoming the focus for housing investment having previously sat in the shadows of the North West. House prices in the region have climbed considerably in the last year, up 11.8 per cent 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 per cent, higher than both the North West (40 per cent) and England as a whole (39 per cent).

Within the Tees Valley area, in particular, Darlington is home to the highest level of rental demand at 52 per cent, with Redcar and Cleveland (46 per cent) also seeing tenant demand for rental homes sit well above the regional average. Middlesbrough is the least in demand at 21 per cent, but is 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 per cent of all dwellings sit within the private rental sector, coming in below the national average of 19 per cent. Hartlepool is also home to a below-average level of rental homes at 18 per cent, while Middlesbrough (20 per cent) and Darlington (21 per cent) 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.

“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. 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.”

By Patrick Mooney, Editor