Gateshead and Newcastle Strategic Housing Market Assessment

Gateshead & Newcastle Strategic Housing Market Assessment ‐ 2010
1.8 The Active Housing Market
1.8.1 The housing market is the context against which all the housing needs of the study area are
set. In particular, house price information is the basis on which the “affordability†” of
housing is measured for low‐income households. In essence, we are seeking to establish
who can and cannot afford to enter and move within the housing market.
1.8.2 The crisis in the financial markets in 2008/09 has created difficulties in the economy,
especially in the house building and estate agency sectors. It has created uncertainty in the
housing market, leading to major falls in house sales, the scale of new development and in
house prices. This will have an impact on future housing delivery.
1.8.3 The prospects for the market in 2010 will depend on how the UK economy evolves and
mortgage lenders policies change, but forecasts are for further price falls in 2010 and 2011.
1.8.4 Fig. 1‐5 shows the average property prices by type of housing in the Land Registry database
for the 2nd Quarter 2010.
Fig. 1‐5 Average House Prices by Type, Q2 2010
£350,000
£300,000
£250,000
£200,000
£150,000
£100,000
£50,000
£0
Detached Semi Detached Terraced Flat / Maisonette Overall
Newcastle £315,416 £191,350 £162,160 £137,514 £178,711
Gateshead £238,854 £144,172 £121,556 £86,962 £138,718
Tyne & Wear £254,852 £149,223 £129,447 £97,768 £129,142
North £249,063 £142,709 £111,290 £113,312 £150,192
England & Wales £328,778 £199,475 £186,704 £219,033 £230,562
Source: Land Registry Residential Property Price Report, Quarter 2 2010, © Crown Copyright
1.8.5 Fig. 1‐5 shows that the overall prices in Newcastle are generally higher than those in
Gateshead, Tyne & Wear, the North East Region and nationally.
1.8.6 Overall between 2005 and 2010, house prices have decreased by ‐3.4% in Newcastle and ‐
6.1% in Gateshead. However prices fluctuated over the period, rising steadily to Q3 2008
before falling through to Quarter 2 2009, followed by a rise each quarter up to quarter 1
2010.
1.8.7 Prices fell again in the most recent quarter of quarter 2 2010 and forecasts are for further
falls in 2010 and 2011.
1.8.8 Sales levels in Newcastle and Gateshead decreased overall between 2005 and 2010 in line
with declining sales levels seen across Tyne & Wear, the North East and nationally.
1.8.9 After a long period of economic growth and low levels of unemployment, this assessment
has been conducted during a period of major economic uncertainty, particularly in the
finance and housing markets.
1.8.10 The financial crisis in the mortgage markets has created a major fall in the availability of
mortgages, especially to first time buyers who now need a deposit of 25%. This is now the
key factor in affordability for new forming households.
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