Complete 2023 Guide.

Newcastle Property Investment

Want To Make A Newcastle Property Investment?

The North East England city has become one of the most popular places to buy property in 2022, with affordable prices and a rapidly rising population of young professionals.

But is an investment property in Newcastle the right thing for you?

Keep reading to find out why you should (or shouldn’t) consider a property investment in Newcastle in 2023.

Let’s get into it:

Contents 

  • Investment Property for Sale Newcastle upon Tyne
  • Why Invest in Newcastle? (Six Reasons)
  • Where to Invest in Newcastle?
  • Newcastle Property Investment FAQs
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Newcastle Property Market Overview

Average Newcastle property prices are just £183,593 – nearly £100k below the UK average (Land Registry, April 2022)

12.37%

Newcastle house values have increased by over 12% in the last 12 months alone. 

No.1

According to a survey from the Mirror, Newcastle was voted the UK’s best place to live.

Top 3

Newcastle offers the top three highest rental yields out of the UK’s most popular investment spots.

Why Invest in Newcastle Property? 

The city of Newcastle upon Tyne – or just Newcastle – has become a hit for property investors targeting the North East region.

Perfect for investors with a smaller budget, Newcastle residential developments and buy to let properties are incredibly affordable with high returns on offer.

So, is Newcastle a good place to buy to let?

See below to find six reasons why Newcastle property investment is a good choice in 2022:

  1. Affordable Housing 

Newcastle is an affordable location for property investors.

Average Newcastle property prices were just £183,593 in April 2022.

Not only are these low property prices under the national average (almost £100k), but it ranks well amongst other nearby investment cities.

Only Liverpool (£174,890), Nottingham (£179,579), and Sunderland (£141,138) were cheaper than Newcastle in April 2022.

The likes of Leeds, Manchester, Birmingham, and Sheffield were more expensive, as you can see from the table below.

City Average House Price Growth (year-on-year)

Sunderland £141,138 12.12%

Liverpool £174,890 10.45%

Nottingham £179,579 10.34%

Newcastle £183,593 6.78%

Sheffield £200,310 5.82%

Manchester £221,485 9.02%

Birmingham £223,037 8.30%

Leeds £231,692 11.37%

Affordability is likely the biggest stumbling block for investors trying to get onto the UK’s property market.

This makes Newcastle’s lower-entry price an ideal choice for beginner investors.

  1. High Demand for Property 

There’s massive ongoing demand in Newcastle’s property market and the private rented sector.

According to Population UK, Newcastle is home to over 320,000 people, with almost 40,000 residents moving to the city since 2011.

This has had a huge impact on residential demand. 

To meet demand, the Newcastle Strategic Housing Market Assessment found that 1,100 new homes must be built annually until 2030.

Recent estimations predict this population will rise even further over the coming years, with a whopping 14,000 new jobs expected over the next decade.

Rental demand has also sky-rocketed in Newcastle in the last year, with data in 2021 showing a 12% increase in demand for Newcastle rental property. 

Meanwhile, CBRE included Newcastle in its list of the top 20 UK towns and cities that will have the strongest demand for rental property over the next decade. 

It’s no surprise that Newcastle rental values increased by 5.4% between May 2021 and May 2022 – a welcome sign for any North East buy to let investors. (HomeLet Rental Index)

  1. Strong Rental Returns 

Thanks to increasing rent and lower property prices, Newcastle’s rental market is generating some high rental returns in 2022.

As of July 2022, the average rent in Newcastle was £1,120 per month. 

This means the average rental yield in Newcastle was a sizeable 7.32%.

And it compares well to other UK hotspots, as you can see in the table below.

City/Area Average Rental Yield Average Rent (PCM)

Leeds 7.90% £1,525

Nottingham 7.75% £1,160

Newcastle 7.32% £1,120

Manchester 7.14% £1,318

Liverpool 6.50% £948

Birmingham 5.94% £1,104

Sheffield 5.84% £975

Sunderland 5.22% £614

Newcastle generates the third-highest rental yields out of the North and Midland’s most popular buy-to-let hotspots. 

It’s especially impressive when you consider you’re accessing average monthly rents of £1,120 for a £183,593 entry price. 

Newcastle has a higher rental yield than popular hotspots like Manchester (7.14%), Liverpool (6.50%), Birmingham (5.94%), and Sheffield (5.84%).

In fact, only Leeds (7.90%) and Nottingham (7.75%) have higher rental yields than Newcastle in July 2022.

  1. Thriving Business Sector 

So, what’s driving the demand for housing in Newcastle?

Newcastle is a major player in the North East economy with many business opportunities attracting residents across the UK.

Although traditionally a prime spot for mining and manufacturing, the Newcastle economy has evolved and diversified into a haven for tech, science, and digital sectors.

The North East city is now home to one of the largest concentrations of video game developers outside the capital.

Digital firms now account for £1.26 billion in the local economy.

Better yet:

Work is constantly ongoing to boost the city’s infrastructure to even higher heights.

The Newcastle city council has secured sizeable funding for business growth over the last five years.

The likes of the Accelerated Development Zone, Stephenson Quarter, and JEREMIE2 regeneration initiatives are boosting the economy by millions.

That’s not to mention the mega Helix project – a £350 million scheme in the west of Newcastle city centre that’s set to boost the economy by £960 million with 4,000 new jobs.

With fresh commercial space, homes, and retail space constantly popping up across Newcastle, one thing is clear:

Newcastle isn’t just an up-and-coming city anymore – it’s already arrived.

  1. Booming Student Market 

Although residential investment property in Newcastle could be your top choice, have you considered a student property investment in Newcastle?

If not, you could be missing out…

Student investment property in Newcastle can be a fantastic investment for income-focused investors, thanks to low property values and high rent.

While it doesn’t offer much capital growth, student property investment can be an ideal way to diversify a portfolio.

Newcastle is one of the UK’s biggest (and best) university cities, with a large student population of over 50,000.

The city features two world-class universities, Newcastle University and the University of Northumbria, and a massive international student population making up 20% of the total student population in Newcastle.

This is significant for student investors looking at purpose-built student accommodation. 

Research from Savills shows that international students are 2.2 times more likely to rent PBSA.

  1. A Great Place to Live 

While we can look at property stats all day, sometimes the only thing that matters is what people think of a city.

And Newcastle has a reputation that’s second to none.

Over the years, Newcastle has continued to excel and win numerous accolades.

It was named one of the best second cities on Earth in 2021 due to its ‘astounding architecture and exciting nightlife.’

Later in the year, the Mirror also published a survey that crowned Newcastle as the UK’s best place to live.

The city is even beloved on the international stage.

Newcastle is one of the UK’s top 15 most visited cities, with over 18 million visitors each year.

Is it any wonder that 36% of Newcastle students choose to stay after graduating?

Newcastle Property Price Forecast 

You might be wondering:

Are house prices rising in the North East of England?

And the answer is yes:

Newcastle house prices increased by nearly 7% between April 2021 and April 2022.

However, growth has stalled in 2022.

Prices between January 2022 and April 2022 increased by just £223.

Property Investment Guide 2023

So does this mean you shouldn’t invest in Newcastle?

Not at all!

In fact, now might be the perfect time to buy a home in Newcastle before prices increase. 

According to the JLL residential forecast 2022-2026, house prices in the North East will rise by 3% in 2022.

This is before a 3% rise in 2023 and a 2% rise in 2024.

Overall, North East property prices are expected to grow by an average of 2.7% annually between 2022 and 2026.

While this is certainly positive, it falls short of other nearby locations, with Manchester doubling Newcastle’s growth in 2022.

So what’s the bottom line?

Newcastle property investment is expected to see decent growth in the coming years. 

But it isn’t as high as in areas like Manchester, Liverpool, and Leeds.

Where to Invest in Newcastle? 

Newcastle property investment can be excellent, but not every area offers the same potential.

With regeneration efforts, tenant demand, and business opportunities differing in each area, Newcastle investors can expect considerable variations in property prices and rental yields.

We’ve done the hard work for you and have calculated the average rental yields for EVERY Newcastle postcode.

Based on our research, the following five postcodes rank amongst the best areas for Newcastle property investment:

  1. NE4
  2. NE7
  3. NE6
  4. NE1
  5. NE11

NE4 

Average House Prices in NE4: £156,265 

Average Rental Yield in NE4: 9.87% 

The NE4 postcode is currently the best place to buy a rental property for rental yields in Newcastle.

Owing to its incredibly low property prices of just £156,265, NE4 investors can expect to see a monthly rental income of £1,285 on average.

NE4 covers Newcastle city centre, Arthurs Hill, Elswick, Wingrove, Benwell, and Fenham.

NE7 

Average House Prices in NE7: £229,030 

Average Rental Yield in NE7: 8.82% 

NE7 is Newcastle’s second-highest yielding postcode and covers Heaton, Gosforth, and Benton.

The postcode can generate huge returns of 8.82%, despite a fairly high average price tag of £229,030.

This is thanks to the considerable rental income seen in the area.

NE7 had a huge average rent of £1,684 PCM in July 2022 – the highest out of all NE postcodes.

NE6 

Average House Prices in NE6: £158,386 

Average Rental Yield in NE6: 8.53% 

Ranked third and following closely behind NE7 is the NE6 postcode.

NE6 spans Heaton, Byker, Walker, and Walkergate and is currently generating returns of 8.53%.

Not only are house prices affordable in NE6 (below the city average), but income is sizeable at £1,126 PCM.

NE1 

Average House Prices in NE1: £175,195 

Average Rental Yield in NE1: 6.37% 

Likely Newcastle’s most popular postcode for young professionals, NE1 covers Newcastle city centre and Newcastle Quayside.

Although rental yields are slightly lower than the top three postcodes, due to a lower monthly rent of £930 PCM, those investing in Newcastle’s city centre can expect high tenant demand and capital growth.

This is thanks to the massive regeneration focused on Newcastle city centre and Quayside.

Brand-new commercial space, retail space, and residential housing have been added over the last decade, with ongoing developments adding even more. 

NE11 

Average House Prices in NE11: £153,137 

Average Rental Yield in NE11: 6.34% 

Rounding out our top five is the NE11 postcode found in Gateshead, a large town opposite Newcastle across the River Tyne.

NE11 features areas like Dunston, Kibblesworth, and the popular trading estate and shopping centres of Team Valley and the MetroCentre.

Despite low house prices, rental income is lacking compared to the other postcodes on this list. 

A monthly £809 leads to returns of 6.34% – just behind NE1.

Newcastle Property Investment FAQs 

How Much Are Properties in Newcastle? 

The average property in Newcastle costs £183,593.

Is Newcastle a Good Place to Buy to Let? 

Newcastle is a good place to buy investment property in 2022. The city is affordable, with property prices below the national average. Rent is also above the national average, helping to generate returns of 7.32% – the second-highest in the North of England behind Leeds.

Is Newcastle Up and Coming? 

Newcastle is one of the UK’s fastest-growing cities. Over 21,000 new homes and 14,000 jobs are predicted over the next decade. The population is also rising, with predictions that the city region will reach 2.75 million people over the same period.

Which is the Best Place to Invest in Property? 

The best places to invest in property include Birmingham, Manchester, Nottingham, Newcastle, Leeds, and Liverpool. They are affordable and are capable of generating high rental yields above 7%.

Are House Prices Rising in the North East of England? <h4>

Yes, house prices are expected to rise by 3% in the North East in 2022.

Is Wallsend a Good Place to Invest?

Wallsend is a town in North Tyneside that is considered a top place for investment and first-time buyers. On average, you can find property in Wallsend for just £152,054 – nearly £130,000 below the national average. The town can generate rental yields of 7.23%.

Is Sunderland a Good Place to Invest in Property? 

Sunderland is a port city found southeast of Newcastle upon Tyne. It’s a more affordable alternative to Newcastle, with an average price of just £141,138. Rental yields in Sunderland aren’t as high as in Newcastle, with average returns of 5.22% – below the 7.32% seen in Newcastle property investment.

What Are the Up and Coming Areas in Newcastle? 

So, where should you make a Newcastle property investment to find the best up-and-coming locations?

Some up-and-coming areas in Newcastle are in the city centre, with areas close to the River Tyne, Newcastle University, and Northumbria University.

These areas are expected to see the most growth and demand over the coming years.

Conclusion: Should You Make a Property Investment Newcastle 2022? 

Should you make a property investment in Newcastle?

The North East city is one of the UK’s most affordable major cities, with strong rental returns and a rising population of young professionals.

In fact, Newcastle has the second-highest returns in the North of England, behind Leeds – all for a much lower entry price. 

But keep in mind that these are just averages. The returns you will earn will depend on how appealing your property is.

Want to learn more about Newcastle property? View our complete guide.

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