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PROPERTYdrum Pulse: Newcastle Upon Tyne

publication date: Oct 18, 2009
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NewcastleI was lucky enough to spend several days in Newcastle upon Tyne; what a vibrant city it is! Freezing cold? Yes. It was. Windy? Yes, straight off the North Sea, down the river, smack in the face. But it was sunny, very sunny and the legendary Geordie warm welcome more than made up for the icy blasts every time I stepped outside.

The lowering River Tyne divides the city of Newcastle from the town of Gateshead. There are seven bridges across the Tyne so there’s no real division; the most famous being The Tyne Bridge, opened by HM King George V in 1928. It was designed by Mott, Hay and Anderson (now part of Mott Macdonald) and built at a cost of £700,000; a recent makeover cost £1.8 million. Inflation for you.

One of the city’s newest iconic landmarks is the Gateshead Millennium Bridge, designed by Wilkinson & Eyre Architects. It leads across the river to the BALTIC Centre for Contemporary Art, an inspired building that hosts an exceedingly broad range of exhibits. Its gift shop is also worth a look, diverse art books, quirky gifts. I purchased a DVD of the live installation (human sculpture) by Spencer Tunick in 2005, where 1700 people walked naked around the city and then all lined up around the Baltic Centre. This took place in the summer but they still looked chilly!

A cup of tea would have warmed them up and Newcastle is just the place for that; Charles Grey, the 2nd Earl Grey, KG, PC (13 March 1764 – 17 July 1845), lived at Howick Hall (some miles north of Newcastle) and was Prime Minister from November 1830 to July 1834. He is commemorated by Grey’s Monument in the centre of Newcastle upon Tyne, a statue of Lord Grey standing on a 130 ft high column.

SUMMARY OF PROPERTIES FOR SALE IN
NEWCASTLE ON www.findaproperty.co.uk

Total properties for sale in Newcastle: 1030
Average overall price of properties for sale
in:
September 2009: £174,903 (-5.6% year on year)
October 2009: £175,391 (-5.8% year on year)
Average Time on property portal in:
September 2009: 136 days (+67.9% year on year)
October 2009: 109 days (-30% year on year)

SUMMARY OF PROPERTIES TO LET IN
NEWCASTLE ON www.findaproperty co.uk

Total number of rental properties in Newcastle: 460
Average overall rent of properties to let in:
September 2009: £775 pcm (-0.9% year on year)
October 2009: £746 pcm (-5.0% year on year)
Average Time on property portal in:
September 2009: 62 days (-8.8% year on year)
October 2009: 63 days (+54% year on year)
There are many other galleries and centres for the arts across the city, including The Sage Gateshead, designed by Sir Norman Foster, which presents classical orchestras such as the Northern Sinfonia as well as rock, pop and folk musicians and an excellent arthouse cinema, the Tyneside Cinema, which has an original 1930s Art Deco cafe tucked away upstairs. The Theatre Royal offers regular doses of Shakespeare and a great deal more.

There are literally hundreds of pubs, clubs and bars, from the city slickers’ Malmaison, the ultra cool Cluny and the retro Centurion to more traditional pubs that have seen many heavy nights and some great live music, producing bands like Lindisfarne and The Animals (when I was a child!).

Gateshead is home to the incredibly impressive Angel of the North, Britain’s largest sculpture, designed by Antony Gormley for Gateshead Council. It weighs 200 tons, is 20m high and has a 54m wing span. The rich red/brown colour comes from the weathering steel which can withstand winds of more than 100 miles per hour. It is visited by over 150,000 visitors every year.

Geordies claim their city has three cathedrals, one Anglican, one Roman Catholic, and St James’ Park. The third ‘cathedral’ is actually the home of Newcastle United Football Club, a giant stadium that towers over the city – and the spiritual centre for the Toons – the fans of this famous club. But sporting Newcastle has broader boundaries than ‘just’ football. The Newcastle Falcons are the region’s most famous Rugby Club and those with a penchant for the gee-gees have one of the busiest racecourses in the UK just three miles from the city centre.

Gateshead International Stadium has an international reputation for hosting some of the UK’s top athletics events and in July the first ever Bupa Great North 10k Run took runners of all ages.

Newcastle shoppingSHOPPING

Gateshead is famous for the giant MetroCentre, one of the largest malls in Europe and there are other malls, including Eldon Square, but the independents are more interesting. Some of the best are in the High Bridge area, with vintage and retro boutiques and jewellers. Jesmond offers slinky lingerie shops like Ophelia and a great shop called Me Me Me which excels at handbags.

ACCESSIBILITY

You can fly almost anywhere in the world from Newcastle Airport, just a few miles form the city centre. Newcastle Central Station is on the main GNER and Virgin train lines. London-Newcastle takes three hours, Edinburgh an hour and a half. The Tyne and Wear Metro light rail system connects all major destinations in the city, linking central Newcastle with the airport in 22 minutes and the coast in 30 minutes. Bright yellow QuayLink electric buses connect Newcastle and Gateshead’s quaysides with Newcastle Central Station, Haymarket Bus Station and Gateshead Interchange.

NewcastleEMPLOYMENT

In a population of 273,000, 131,900 are ‘economically active’ and 118,800 are in employment, giving an unemployment rate of 9.6 per cent (Mar 2009), against the national rate of 6.2 per cent. However, in Newcastle East and Wallsend, the unemployment figure is 13 per cent, the highest in the region. Major employers in Newcastle include Northern Rock, Barratt Homes, The Go-Ahead Group and Northern Electric. Other large employers are BAE Sysytems, GE Money, British Engines, Bellway plc, Accuread and Chieftain Group plc.

LIFESTYLE

There is every opportunity to enjoy a great lifestyle in Newcastle and the surrounding area. From highbrow (but accessible of course) cultural events to Wet and Wild; from kite flying in Leazes Park to the Childhood Memories Toy Museum with 7000 toys on display; from the quayside packed with bars, restaurants and a great market, to the brisk refreshing coastline.

The modern European city lifestyle has definitely arrived in Newcastle. Not only are there coffee shops – there are coffee shops in property offices! Sanderson Young has created 12 new jobs and brought the café culture to Gosforth High Street.

In a £350,000 project Sanderson Young has expanded into former Your Move offices giving a landmark building a complete refurbishment, and bring together the sales & lettings office, the Private Finance Department and the in-house design and media studio. All excellent but they are aiming to keep the prospective clients on site by offering a chic coffee shop with sandwiches, cakes and biscuits and free Wi-Fi access.

Newcastle footballWHY DO PEOPLE MOVE TO NEWCASTLE UPON TYNE?

“People move here for a variety of reasons, work, the university and our excellent schools. We also have great shops and sports facilities,” says Claire Milburn, Area Sales Director at Your Move, Jesmond.

“Newcastle is a vibrant city, with many national and international companies based in and around the city. It is home to two universities and we also find that the city has strong demand from foreign students and business men and women.” Says David Barbour at Martin & Co.

While the city centre is popular, outlying areas are also in great demand: “Whitley Bay and Alnwick are very popular,” says Robert Clarke of Your Move.

“Whitley Bay; much loved for its beaches and fresh air, has some very good schools and Metro access to the city. Alnwick is also very popular with tourists and for retirement purchases,” he says.


Newcastle figures table


RESIDENTIAL SALES

City centre demand has increased, says Claire Milburn at Your Move. “We are seeing increased interest, particularly in the lower price ranges, but there are about 18 viewings, on average, per property before a sale is agreed.”

In Whitley Bay and Alnwick, Robert Clarke, Area Sales Director, Your Move, says that there are fewer browsers and more motivated buyers now and they are looking for 3-4 bedroom terraced or semi-detached homes.

Newcastle“Prices have stabilised but the houses still need to be competitively priced to sell, people are making offers but the final selling prices are generally only around 5 per cent under the asking price,” says Robert. “Having said that, the motivated ‘must sell’ vendor is certainly taking our advice on price reductions.”

Claire Milburn agrees but says reductions in the city are greater, “Some vendors are reluctant to reduce asking prices and we are finding that the final sale price is often 10-15 per cent less than the vendor originally sought.”

Janet Hopkinson, Sanderson Young’s Operations Director, says they sell properties in all price brackets; they have a huge house called Birney Grange on at £3.25m, complete with pilloried portico, a leisure wing with swimming pool and hot tub and extensive grounds.

At the other end of the scale, at 55 Degrees North they offer a one bedroom city flat at £135,000 – very smart and modern with fabulous city views.

The main demand at the moment is for smaller houses in the £200-300,000 bracket; sellers are usually very motivated. “Yes the sellers who are putting their properties on the market have the definite want to sell, the instruction levels are down and fall-throughs are not happening as much as they were and people aren’t just testing the market, they really want to sell, especially now they have to pay for HIPs.” Equally committed are those viewing, “We haven’t seen any great increase in the numbers registering, but those who do register are set to move.”

Philip Evans, Senior Branch Manager at Keith Pattinson says investors are buying, prices have levelled out and investors are buying multiple properties. “There is a definite boom in the market for smaller properties and prices are rising, some sales are achieving prices well in excess of the asking price. Most properties are sold after just seven viewings.”

Newcastle houseLETTINGS

DK Lettings is an independent lettings agency based in the centre of Newcastle. Andrew Wilkinson says that there hasn’t been much change in activity levels in the past year, “It’s always busy, demand and actual lettings are steady, as are rents which have only increased by about one per cent. Our market is mainly in flats for young professionals.”

David Barbour, Director, Martin & Co Whitley Bay and Martin & Co Newcastleupon- Tyne says that there has been a large increase in tenant enquiries with two bedroom properties in great demand, both furnished and unfurnished, particularly in the City Centre and Coast areas.

“Rents have increased on last year, on average by £25.00 per calendar month and desirable properties in a good condition tend to achieve near to if not the full asking price as most landlords are holding out for their asking rent,” says David.

In the City, Andrew Wilkinson says that landlords will take advice and reduce rents, “They will, because they know that void periods are expensive in the long run.” A void period of two months on a £1000 rent is quite painful, a lot more than say, reducing the price by £50 per month, which will give a reduced revenue of just £300 for the six month tenancy. “We tend to let most properties within three to five viewings,” he says.

And there is even greater speed in Keith Pattinson lettings, Philip Evans says that most properties are snapped up after just a couple of viewings.

PREDICTIONS FOR THE LETTINGS MARKET IN NEWCASTLE FOR 2010?

David Barbour thinks that rents will hold or increase, demand for mid market will stay strong but tenants will not move as frequently, lowering the churn rate.

NewcastleAUCTIONS

John Milton is the owner of Newcastle based auctioneers Sell By Auction. He says that there has been a definite upturn in interest in buying property at auction, with three bedroomed houses between £140-180,000 being his main market. His October sale had 32 properties and was about to take place as PROPERTYdrum went to press. With guide prices from just £30,000 up to half a million pounds he’s expecting a busy day. One that looks good value is a recently built four bed detached with a guide price of £160-180,000. “Prices haven’t changed very much but sellers are getting around 10-15 per cent less than they would like.” Says John. He also has a portfolio of 10 apartments, all tenanted, for sale, either individually or as a whole, with purchase guide prices between £90- 130,000 each and rents at £570-£590 pcm.

Pattinson Auctions are also keeping very busy, their October catalogues lists 108 properties, commercial and residential, with starting prices from £35,000 to £700,000. At their last North East auction, at the end of September, 114 lots were offered, 55 were sold raising £5.17 million.

NewcastleCOMMERCIAL PROPERTY

Naylors report that after the worst year for commercial property for at least 15 years, enquiry levels are on the increase with transactions being completed, as opposed to being just talked about and there is, at least, the expectation that things will be improving soon. Whilst the speculative development market for all forms of commercial space has pretty much ground to a halt, there are a number of big ticket transactions in negotiation that look likely to happen with big industrial announcements likely soon on Tyne Riverside and in Washington.

New space remains available in schemes planned in better times and which are now complete and ready for purchase or letting. Some of the highest quality modern offices on Tyneside have recently been completed by The Robertson Group/ City and Northern at Baltic Place. Elsewhere, Caddick have recently topped out their Newburn Riverside scheme which boasts both factory and office space. With the smaller occupier in mind, office and workshop properties are available at Cramlington, Orion in North Tyneside, Team Valley, Monkton and Boldon in South Tyneside and at Sunderland Enterprise Park, so there is choice.

Meanwhile, vacancy rates have risen from around 5 per cent to about 20 per cent in many business property portfolios, opportunities exist in most locations and with rents lower than they were and landlords increasing the incentives available, there has never been a better time to take a property.

Rents and prices depend on size, location and quality, but broadly speaking, offices rents are between £15 and £18 per sq ft, and industrial rents range from £5 to £6 for new or modern accommodation.