Sunday 22 September 2019

The UK city where house prices will rise by 18pc in the face of Brexit

Technical revolution: Newcastle upon Tyne is maturing into a forward-thinking arts and tech hub of the North East of England
Technical revolution: Newcastle upon Tyne is maturing into a forward-thinking arts and tech hub of the North East of England

Liz Rowlinson

Renowned for its no-nonsense locals, stag-and-hen party brand of nightlife and proud independence, Newcastle upon Tyne is maturing into a forward-thinking arts and tech hub of England's North East. The city that came into its own during the Industrial Revolution - spawning the idiom "taking coals to Newcastle" - is unrecognisable from a decade ago.

"Now is a great time for Newcastle," says James Hall of Barton Willmore, a planning consultancy. "It may never be able to compete with Edinburgh and Leeds in terms of economic clout, but there's an awful lot going on. There are 12,000 new homes in the pipeline, but the real challenge is to retain all the graduates."

More than one in six of the 304,600 locals are enrolled at Newcastle or Northumbria Universities, and student accommodation is being built at the highest rate in the UK. The universities are major employers of their graduates, as are a new sciences village called Centre for Life and the global headquarters of software company Sage.

Some may also be drawn to the cutting-edge tech and science campus on the site of the former Scottish & Newcastle brewery.

The Newcastle Helix is a Stg£350m joint venture between Newcastle University and the city council, and includes a new cyber project that was opened by the fintech philanthropist and Black Eyed Peas singer in November. The city's tech sector, combined with that of nearby Gateshead, is worth Stg£1.25bn.

Another major regeneration site, the Quayside's Stephenson Quarter, promises to bring 3,000 jobs into the city centre. It will house Tribes Like Us, a programme to help digital start-ups, as well as the new University Technical College, North East Futures.

Further jobs are in the pipeline with the redevelopment of the former Bank of England site on East Pilgrim Street with retail, leisure and office space. There are also proposals for a boutique hotel and 300 homes. The site belongs to Taras Properties, owned by the billionaire brothers David and Simon Reuben, who also own chunks of prime central London .

"This scheme is a game-changer for the city centre," says Ray Minto, of Savills' Newcastle team. "It will massively transform the retail offering, along with improvements on the main shopping artery Northumberland Street, where Mike Ashley, the owner of Sports Direct, has bought a building."

Minto points to areas that have already been regenerated, such as Ouseburn, where former grain warehouses on the river banks became a cool cultural quarter that helped build its reputation as a great music scene.

The former pottery, The Malings, is an award-winning redevelopment by Igloo Regeneration with 76 homes from Stg£129,000, and on the Quayside there are plans to build Europe's biggest Ferris wheel, unselfconsciously called the Whey Aye, costing Stg£100 m.

Already home to excellent art galleries, concert halls, bars and restaurants, the joy of Newcastle is that nothing is too far away, including three national parks, the sea, or even snowboarding (on the Pennines). It's also the greenest city in the UK when it comes to the number of people per sq ft of green space, with 10pc of the land given over to parks, bowling greens and allotments.

It was all of this, along with the affordability of the housing, that persuaded Newcastle University English graduate Hannah Hughes (24), originally from Henley-on-Thames, Surrey, to stay in the city.

"I fell in love with the village culture. There's a sort of three degrees of separation between everyone," she says. "The beautiful countryside was also part of it. Doing the coast-to-coast bike ride made me love cycling, and here is great for Hadrian's Way and the Coast & Castles bike ride up to Edinburgh via Alnmouth."

Hannah works for the cycling holiday company Saddle Skedaddle and lives next to Jesmond Dene, a wooded valley corridor in the city centre.

"Buying a home here is imaginable, unlike down south, so that is another reason I am staying," she says.

House prices in the North East are expected to rise by 17.6pc in the five years to 2023, according to Savills, almost four times the 4.5pc predicted growth in London and above the UK average of 14.8pc. Although prices in Newcastle have risen by 25pc over the past five years, the average price is only Stg£202,589, according to Rightmove.

Rental yields were among the top 10 in the UK in 2017, according to Surrenden Invest, which is selling apartments in 27-storey Hadrian's Tower. It is the tallest proposed building in Newcastle, due for completion in 2020, and flats start from Stg£166,000.

"Many of the 65 units sold so far have been bought by buy-to-let investors , people who didn't really look at Newcastle 12 months ago," says Jonathan Stephens, the company's managing director.

"The three-bedroom penthouses are the most expensive properties per sq ft in the city, at Stg£573."

Lesley Roberts, of property consultancy Allsop, says there is a latent demand for high-quality rental properties.

"Traditionally, rents haven't accelerated in Newcastle as they have done elsewhere, but graduates need to move to good-quality accommodation if they are going to stay in the city," she says.

Allsop is managing The Forge, the first build-to-rent scheme on Newcastle's Quayside. It has 283 apartments with a 24-hour concierge, gym and club lounge, with prices from Stg£675 per month.

Rob Taylor, of agent Rettie & Co, says he has noticed an influx of people from other parts of the country.

"There's increasing interest from outside the region, from people seeking to take advantage of affordability and the remote-working revolution, as it's three hours by train to London," he says.


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