As someone who lives and works across the North and East of England, from the Wash to the Scottish Borders, I’ve long been a champion of the region’s property potential and witnessed it first-hand in my long career in short-term property finance.
Therefore, it is no surprise to me that the latest figures from the Office for National Statistics [ONS] show house prices in the North East are rising at the fastest pace of any region in England.
In fact, according to the ONS, the average UK house price rose by 4.9% in the 12 months to January 2025, which represents the highest rate of growth in two years. But what’s particularly interesting is that regions like the North East and Yorkshire & the Humber are outperforming the national average.
This surge in price growth across the region is being driven by ongoing demand, limited supply, and a renewed confidence in the housing market, which may be a surprise given the imminent rise in Stamp Duty.
Some of the sharpest increases have been in areas often overlooked by mainstream investors, such as County Durham, with average house prices of just £134,078. When you compare that with average local earnings of around £29,000, it’s easy to see why savvy investors are jumping at the chance to secure property with room for capital growth.
We’re also seeing activity in traditionally quieter parts of the East Coast. Towns like Scarborough, Boston and King’s Lynn are increasingly appealing to developers and landlords looking for high-yield rental opportunities, particularly with the rise in remote and hybrid working. People are more willing to move further afield in search of space, lifestyle and value.
Rental demand remains strong
The rental market tells a similar story. Rents across the UK rose 8.1% year-on-year in February 2025, with the North East once again outpacing many other regions. Demand for rental homes is being driven by a growing population of young professionals, students and key workers, which means in places like Newcastle, Middlesbrough and Hull, the returns stack up for landlords.
Of course, like most booms of this nature, it isn’t without its challenges. The ONS recently highlighted the affordability gap in England, where the average home now costs 8.6 times the average household disposable income, meaning the ratio has almost doubled since 1999.
While the North naturally remains more affordable than London or the South East, there’s growing pressure on first-time buyers and younger people trying to get onto the ladder – something the Government hopes to address with its recent commitment of £2 billion to construct up to 18,000 affordable homes in England.
At Signature, we understand that this market isn’t one-size-fits-all and tailor all our deals to the unique circumstances of each borrower. We work closely with brokers, developers, investors and landlords who are trying to deliver the right kinds of homes for local needs. Whether that’s renovating older housing stock, converting properties into HMOs, or building small-scale developments of up to 15 new units, we’re ready to listen.
Short-term bridging and development finance plays a vital role in making that happen. It helps investors act quickly when opportunities arise and it allows experienced developers to bring unloved or dilapidated properties back to life – or even change their use to something more valuable. More importantly, it keeps the housing supply moving in a market where demand is only heading one way — up.
So, while the headlines might focus on national averages, what’s happening on the ground in places like Darlington, Doncaster and Durham tells a more exciting story. The North East isn’t just levelling up, it’s leading the way. And for those of us who know and love this part of the country, that comes as no surprise at all.
If you are looking at investment properties in the North and East of England, please get in touch, so we can discuss your options, including our Revolving Credit Facility, which may help you react more quickly when opportunity knocks.