Is Newcastle a Good Place to Invest in Property?

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<strong>Is Newcastle a Good Place to Invest in Property?</strong>
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If you’re looking to invest in property, you may be wondering if Newcastle is the area for you. While this may seem like a daunting process, we’re here to talk you through how this works, including the Newcastle rental market, rental yields, how to become a Newcastle landlord, and even what to do if you want to stop investing in the future.

Keep reading to find out if Newcastle is a good place to invest in property, and how you go about embarking on this process.

What does Newcastle’s rental market look like?

The rental market in Newcastle is thriving, with an average rent of £1,136 per calendar month. This major UK city holds one of the best affordability ratios among the top five major investment cities in the country, making it extremely appealing to potential investors.

The average property price in Newcastle is £184,223, which has decreased by 5% over the last year (comparing November 2022 with November 2021). This indicates that now is a great time to be investing in Newcastle property, as you can get a great deal on a house in this popular city while benefitting financially from the thriving rental market.

The population of Newcastle has increased over the years due to its flourishing economy and strong public infrastructure, leading to high demand for rental properties. It’s considered an affordable city to live in compared with other areas in the country, resulting in Newcastle being both a popular location to live and invest in.

173 properties have been listed for rent in Newcastle in the last 14 days, showing that there’s a high demand for new rental properties in the area. Most rental properties in Newcastle are flats, giving buyers a great return on their investment with affordable property prices and lucrative rents.

What rental yield can investors expect?

With an average property price of £184,223 and monthly rent of £1,136, purchasing a property for rent in Newcastle provides a rental yield of 7.4%. Between 5% – 8% is considered a reasonable rental yield, therefore an average rental yield in Newcastle of 7.4% indicates that purchasing a property in Newcastle for rental income is a fantastic investment for your property portfolio.

How can you become a landlord in Newcastle?

With rental prices increasing in the Newcastle area, it’s unsurprising that many investors are looking at Newcastle when it comes to purchasing properties to rent out. There is also a strong student presence in Newcastle due to the city university, providing a good market of people to target when renting out your property.

Ongoing property costs

To become a landlord in Newcastle, you first need to consider not only property prices in Newcastle but also the ongoing costs of being a landlord.

These are likely to include the following:

  • Mortgage repayments (unless you’re a cash buyer)
  • Tax on rental income
  • Estate agency costs
  • Set-up costs (property cleaning, certificates etc.)
  • Ongoing maintenance fees

It’s important to understand the above costs as well as your responsibilities as a landlord before embarking on property investment. Once these have been researched and understood, you’ll need to choose an appropriate location for your investment property.

Points to consider include price, transport links and local amenities – these are all important factors when ensuring your property will appeal to those looking to rent a property in Newcastle.

Looking for a Newcastle property

Once you know where you’re looking to purchase a property, you can start browsing the market. At this point it’s worth considering whether you’d like to purchase a property at auction – this can result in a cheaper property price, however, significant work is usually required on properties sold at auction to bring it up to good rental standards. If you’d prefer to purchase a property that doesn’t need a lot of work carried out, you’re better off buying a home on the traditional property market.

You may need to consider a buy-to-let mortgage if you’re not buying your property outright. Seeking advice from a mortgage broker may be applicable here to ensure you’re getting the best deal on your investment.

Lastly, you’ll need to ensure that your new property meets the latest building and fire safety regulations, as well as electrical certificates to prove the property is safe for occupancy. Estate agents can assist you with these matters – more on this later.

Property management

Once you’ve bought your property and have ensured that it meets the latest building and fire safety regulations, you’ll need to decide whether you want to privately rent your property or choose a reliable Newcastle estate agent to manage it for you. Property management includes the following responsibilities, so if you don’t have a lot of time on your hands or are inexperienced in property renting, we recommend looking at an estate agent to assist you with the following accountabilities:

  • Finding tenants
  • Taking rent payments
  • Maintenance correspondence
  • General overseeing of property (regular inspections etc)

Landlord insurance

Once you’ve found tenants for your rental property and are ready to start making money on your investment, the last step you’ll need to consider is protecting yourself in case the worst happens. This is where landlord insurance comes in.

Landlord insurance covers you in case of fire, flood, and subsidence of your rental property, as well as emergencies such as broken boilers or burst pipes. Some landlord insurances include public liability insurance, to ensure protection if a visitor is injured at your property. You can compare prices for landlord insurance via the main comparison websites or request a quote directly from your preferred insurance company.

It’s worth bearing in mind that some mortgages require landlord insurance as standard to ensure the property is well protected – your mortgage provider should indicate if this is a requirement when taking out a mortgage with them.

What happens if you want to stop investing?

There are situations where you may want to stop investing in a Newcastle property. These may include financial reasons where selling a property is necessary if you require a quick cash injection, or major life changes may affect your decision when it comes to investing in property.

Thankfully there are options available to you if you find yourself in a situation where you no longer want to invest in a property. Here at We Buy Any Home, we regularly purchase tenanted properties in the Newcastle area, helping investors to get out of the property investment game should they wish to do so.

There are many benefits to selling a tenanted property, the main one being that you won’t need to worry about giving your tenants notice before you can put your property on the market. We specialise in purchasing properties with tenants in situ, ensuring that you achieve a quick sale on your property and the tenants won’t be required to leave – providing that there are appropriate tenancy agreements in place.

This process involves getting a free, no-obligation cash offer on your property from We Buy Any Home via our website. A member of our team will be in touch to discuss your details, with no property visit required. You’ll receive a cash offer from our team within 24 hours, and a final offer will be processed in writing to give you complete peace of mind.

Once you’ve accepted our offer, we’ll instruct a solicitor to act on your behalf and a survey will be organised to confirm our offer on your property. The best part of choosing We Buy Any Home to purchase your tenanted property is that we’ll cover the costs for both services! The last step is to agree on a completion date, and once this is reached your funds will be transferred. To get you’re your free cash offer and get the ball rolling, simply apply for a free cash offer today.

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