Property Investment Newcastle | Complete Guide 2022
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Newcastle property investment portfolio

Arc Avenue

Arc Avenue,
Newcastle

Arc Avenue is a beautifully executed conversion comprising of just 58 charming one and two- bedroom apartments ideally located on the south bank of the Tyne River.
  • Grade II Listed Period Conversion
  • Located on The River Tyne
  • Completion November 2021
  • 15% below market comparable values
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Welcome to Newcastle

Newcastle upon Tyne – or just Newcastle – is the largest city in the North East of England and the region’s central employment hub.

Voted the friendliest city in the UK, the Geordie accent is one of the most recognisable regional dialects. As one of the UK’s most loved cities, it is a popular tourist destination in its own right, attracting those interested in its historical ties to the Roman era and the Industrial Revolution and, with a large selection of modern-day attractions, Newcastle truly has something for everyone.

Some of the UK’s most recognisable and iconic landmarks are dotted around the city, including Newcastle Castle, Greys Monument, the Angel of the North, plus the world-famous The Tyne Bridge and Gateshead Millennium Bridge that connects it to its twin city, Gateshead. As the most populous city in the North East, Newcastle is home to around 300,000 people, with the surrounding urban area housing around 1.1 million residents.

Together, Newcastle and Gateshead are the key employment hubs in the North East and the main driver of the city region growth and, despite the pandemic, is featured on PwC’s Good Growth for Cities Index. In recent years, Newcastle has emerged as one of the UK’s fastest-growing cities, carving a name for itself as the epicentre of business growth in the North East. The low cost of living and employment prospects have not gone unnoticed in the region and has caused the city’s population to swell by 113% between 2002 and 2015.

With two prestigious universities and a student population of around 50,000, the Tyneside City is also popular for higher education. As one of the most affordable UK university cities, students have been drawn to Newcastle for its excellent social scene and nightlife, plus its vibrant display of galleries and museums. In addition, students often stay in the city due to the excellent employment prospects for graduates.

Highlighting the city’s appeal to the Millennial and Gen Z demographics – which make up the tenant profile of those most likely to rent – a recent survey ranked Newcastle as one of the UK’s best locations for young adults. Newcastle has plenty to offer investors for those considering entering the buy-to-let market in 2022. Encouraging trends such as a range of largescale regeneration projects, a robust regional forecast, and a rising population make the future very bright for property investors.

Newcastle property investment at a glance

14.0%
PROPERTY VALUES IN NEWCASTLE ARE 14% LOWER THAN THAT OF BIRMINGHAM AND MANCHESTER.
17.6%
17.6% EXPECTED HOUSE PRICE GROWTH BY 2026.
7.40
RENTS EXPECTED TO CLIMB ON AVERAGE BY 7.4% IN THE NORTH EAST REGION BY 2025.
1,100
1,100 NEW HOMES ARE REQUIRED IN NEWCASTLE PER ANNUM UNTIL 2030.
12.0%
12% INCREASE IN DEMAND FOR RENTAL PROPERTY IN NEWCASTLE’S CITY CENTRE IN 2021.
43.0%
PROPERTY PRICES HAVE CLIMBED BY 43% OVER THE LAST 10 YEARS.

Newcastle: A North Eastern Powerhouse

As a Northern Powerhouse city, it is easy to overlook Newcastle favouring more prominent regional hotspots. Yet this famous riverside city is undergoing unprecedented investment levels, helping it emerge as a North Eastern Powerhouse in its own right.

Together, the combined urban cores of Newcastle and Gateshead have flourished into a prosperous location for business activity in the North East.

In recent years, Newcastle and Gateshead have benefitted from a £92m investment programme dubbed an ‘Accelerated Development Zone’ (ADZ), which has helped stimulate business and create new jobs across the region.

A part of the ADZ includes the creation of the £200 million Stephenson Quarter, which contains a mixed-use commercial regeneration scheme that has helped expand the revitalisation of the city’s urban core. The Stephenson Quarter is set to benefit from the £4 million redevelopment of Newcastle’s Victorian Central Station, which will create two new entrances, plus a new concourse, taxi rank and car parks as part of the North East Local Enterprise Partnership (LEP).

Leading the way in science and tech

Over the last five years, Newcastle’s tech sector has witnessed significant growth, with digital firms in the region generating a combined turnover of £1.26 billion – up 25% from last year.

The introduction of the hotly anticipated £120 million JEREMIE2 has continued to fuel the tech sector’s growth in the region. It is expected to support over 600 businesses and help create around 3,500 new jobs over five years.

Newcastle is one of the best up and coming areas in North East England, and is home to one of the largest concentrations of games development companies outside of London.

With the tech sector booming in Newcastle, it is easy to see why the North East of England has been described as the ‘fastest-growing tech hub’ by the then Secretary of State for Digital, Culture, Media, Matt Hancock.

Newcastle will also benefit from the construction of the £350 million Helix project, which has been hailed as the ‘biggest regeneration’ the city has seen in decades. The flagship project at the western edge of the city centre will see the creation of a huge science and business park alongside additional commercial and residential space. The Helix is set to create 4,000 new jobs and boost the economy by £960 million upon completion.

However, it is not just the tech and science sectors making waves across the city. Newcastle is also an attractive location for start-ups and was ranked 12th in the UK’s top 15 UK cities in 2021 to launch a business. Across the north of England, the Northern Powerhouse initiative will continue to provide ongoing scope for new developments that will power a resurgence in the economy in the North East.

Cities including Newcastle remain an attractive option for investor activity and will continue to deliver a wide range of benefits for property investors in 2022 and beyond.

The UK’s most-loved city

Voted the nation’s favourite place to live in a 2021 poll, Newcastle is one of the UK’s most-loved cities – and it is easy to see why. Newcastle is one of the UK’s Core Cities, yet despite its status as a powerhouse for employment and education, it remains one of the friendliest places to live. The city offers exceptional value for money while offering its residents the bright lights and attractions of living in a prominent city centre.

As one of the best cities for adults to live in, the variety of attractions in Newcastle and the neighbouring town of Gateshead continue to attract people to the area. Home to a selection of high-end restaurants, bars, comedy clubs and music venues, Newcastle regularly tops the rankings of the best place for a night out in the UK.

However, it’s not just people based in the UK who have great things to say about Newcastle. The 2021 Smart Cities Index, which measures how technology improves local communities, ranked Newcastle number one in the UK, surpassing London and Manchester in the listing. Ranked in the UK’s top 15 most visited cities, it is thought that around 18.65 million people visited Newcastle and Gateshead in 2018, with visitors spending in excess of £626 million. With major events, iconic attractions and concert and cultural experiences, Newcastle is a destination that has to offer visitors and residents alike.

To review the best areas to live in Newcastle Upon Tyne, simply scroll to the location section on this page.

What’s driving demand for housing in Newcastle?

The variety of opportunities across the UK’s property market has allowed investors to look beyond traditional hotspots for long-term capital growth potential.

It is always a good idea for those exploring their options to look towards new places such as Newcastle as an investment option. Lower entry-level opportunities with high demand from tenants can be an excellent choice for property investment portfolios.

When it comes to weighing up where to purchase a buy-to-let property, it is essential to determine who you are renting to and what tenants want from their home before buying.

High demand for housing

Newcastle’s Strategic Housing Market Assessment has outlined that around 1,100 new homes are required per annum until 2030 to meet demand. However, with the city’s population rapidly rising due to improving employment prospects in the region, the level of housing required is set to be adjusted upwards to reflect a more realistic figure.

Recent projections expect 14,000 new jobs over the next 10 years, which is likely to see the population swell to reach over 310,000 by 2030 and the wider population to hit over 2 million by 2030.

When it comes to tenant profiles, investors will be interested in knowing that Newcastle has a significantly higher proportion of its population aged between 16 to 24 compared to the rest of the North East, reflecting its large student population and high graduate retention rate. This is good news for property investors, who often rent property to this age group.

As we look towards the future, Newcastle’s property market is likely to see a rise in demand from renters and buyers alike, making it an ideal location for investors who want to secure rental returns from a property and sell at a profit at a later date.

Newcastle’s economy

Traditionally dominated by mining and manufacturing, the North East economy has diversified over recent decades, with Newcastle emerging as the region’s best economic performer. Across the North East region, Gross Value Added (GVA) per head was highest in Newcastle upon Tyne, accounting for 22% of GVA in 2018.

Multibillion-pound regeneration projects continue to make a case for long-term investments, including upgrades to the East Coast Main Line, Northern Powerhouse Rail and the Newcastle International Airport 2030 Masterplan.

Forward-thinking investors who consider destinations like Newcastle that are currently witnessing strong growth are likely to be rewarded over the long-term as demand for property strengthens from those who want to live, work, and study in this exciting riverside city.

BIRMINGHAM
%PA202020212022202320242020-24
PRICES2.0%3.0%3.5%3.5%3.5%16.5%
RENTS3.0%3.0%3.5%3.0%2.5%15.9%

Newcastle property market overview

Over the last decade, one of the most encouraging trends to have emerged is the rise of regional property hotspots like the North East of England. With London and the overall average performance of the UK’s property lagging behind property hotspots in the North, buyers who look beyond the South of England for investment property have been rewarded with stronger capital gains and higher rental yields. Cities like Newcastle, which are undergoing rapid regeneration, have been clear favourites for property investors. With prices significantly lower than those seen in London, plus rental growth and capital appreciation forecasts almost in line with top regional property hotspots, Newcastle has emerged as an ideal location for investment.

Regionally speaking, research from Savills has highlighted strong prospects for house price growth in the North East, with values expected to climb by 17.6% by 2026. Although the North West (+ 18.8%) and Yorkshire and the Humber (+ 18.8%) are set to see values climb at a marginally higher rate, those entering the market with capital gains in mind will be impressed by the growth on offer in Newcastle.

In context, mainstream UK house prices are forecast to rise by just 13.1% over the same period. With the fastest growth available across the North of England, Newcastle property price forecast is robust and will enable investors to benefit from this reassuring trend on the market in the coming years.

Encouragingly for buy-to-let investors, Newcastle property prices tend to be significantly lower than its regional counterparts, making it a popular option for portfolio diversification and first-time investors. Prices have climbed by 43% over the last 10 years, with the average cost of property in Newcastle currently standing at £231,953. When compared to average asking prices across property hotspots such as Manchester (£246,383), Leeds (£236,163), Birmingham (£234,080) and Sheffield (£232,562), it is easy to see the value on offer across the Newcastle market.

Naturally, buyers who take advantage of the lower entry-level property investments also benefit from lower Stamp Duty obligations. As Newcastle becomes more prosperous, it has emerged as an affordable location that attracts investors keen to enter this rapidly growing property market. What’s more, when it comes to long-term capital growth potential, it is also worth noting that house prices in the North East have only recently returned to pre-recession levels. So this major UK offers plenty of growth potential for buy-to-let investors over the coming years.

Data released in the Barrows and Forrester Rental Demand Index has shown that the demand for a rental property in Newcastle’s city centre increased by 12% in 2021, making it one of the most in-demand locations for the rental property following the easing of lockdown restrictions. Echoing this sentiment, Newcastle was included in CBRE’s top 20 towns and cities across the UK that are set to see the strongest demand for private rented accommodation over the next 10 years.

Value for money is an appealing factor for tenants in Newcastle, with median monthly rent in Newcastle currently standing at £695 – slightly lower than the £730 recorded in England, marking the highest ever recorded. With rents expected to climb by an average of 7.4% in the North East region by 2025, investors looking for rental property could find exactly what they’re want in Newcastle.

For those considering buy-to-let property in 2022, one of the primary considerations will be the reliability of demand from tenants – especially when considering changes to market trends following the lifting of restrictions in light of the Covid-19 pandemic. The continuous demand for rental accommodation from university students often makes cities home to a large population of students an excellent long-term investment option. Newcastle is one location where this trend is particularly evident however, it’s not just Purpose Built Student Accommodation that appeals to the city’s university intake.

The city is home to two main higher education institutions – Newcastle University and the University of Northumbria – with a combined student population of almost 50,000 people. Both institutions have experienced stable application numbers in recent years, and forecasts suggest this will continue, especially in light of Newcastle University’s involvement with the £250 million Helix project with Newcastle City Council. Meanwhile, the University of Northumbria has invested £200 million in its city-centre campus over the past 10 years.

Newcastle’s ability to attract and retain graduate students is another trend property investors should pay attention to. According to the Centre for Cities, Newcastle has a high graduate retention rate, with 36% of graduates remaining in the city, while 50% of those who leave for university return once they graduate. Furthermore, international students account for around 20% of Newcastle’s total university attendees. The considerable number of international students is great news for property investors. This demographic often has the budget to pay a premium for high-quality housing in a convenient location.

Buyers looking for buy-to-let investment opportunities should therefore consider towns and cities with a large student population since this demographic has the potential to fuel rental growth for many years to come.

Where to invest in Newcastle?

Newcastle is a source of great potential for property investors, particularly those looking for opportunities in the Northern Powerhouse that don’t have the same affordability constraints as some of the region’s rising stars. From substantial levels of investment to the wider regeneration of the North East, there are many reasons why Newcastle has emerged as an attractive property investment destination. In this section, Surrenden Invest breaks down the up and coming areas in Newcastle for investment and highlights the market fundamentals that continue to underpin demand for rental property.

Newcastle’s City Centre is seeing the benefits of major regeneration schemes, with pockets of the centre transformed into modern commercial and residential hubs that stand side by side with period properties. Newcastle is one of the UK’s most-walkable city centres, so centrally-located private residential housing often benefits from excellent transport links.

In recent years, the Quayside area has undergone significant regeneration, transforming the waterfront into a hotspot for commercial space in the shape of hotels, restaurants and bars. As one of the UK’s iconic waterfront cities, properties with river views of the city’s skyline are naturally an excellent choice for buy-to-let investment. Newcastle already boasts exceptional regional and national transport links, and this will be boosted by the £4 million redevelopment of Victorian Central Station. Investors are uniquely positioned to capitalise on the city’s opening up from both a residential and commercial property aspect.

Separated from the city centre by the rolling greens of The Town Moor sits Newcastle’s most desirable and affluent suburb, Gosforth. Situated to the north of the city centre, alongside the village of Jesmond, Gosforth is a sophisticated suburb, with some of the highest property prices on the local market record in this district.

With its quirky character and plenty of green spaces, this affluent corner of Newcastle is a firm favourite for families and professionals, attracting the likes of doctors and lawyers. Gosforth has become increasingly popular among families, with five out of the area’s ten schools ranked as Outstanding and the rest ranked as Good by Ofsted. This sought-after corner of Newcastle offers residents plenty to do. It is famous for its fine dining, friendly pubs, trendy cafes, gyms and sports clubs, plus with several supermarkets and quirky boutiques, residents have access to everything they need on their doorstep.
Gosforth is one of Newcastle’s most well-connected suburbs and is an ideal location for commuters when it comes to transport links. It is just 2 miles from the City Centre via the Great North Road, plus the Metro Station offers easy access with frequent bus services. The Tyne and Wear and Newcastle International Airport are also just 5 miles away.

Much of the existing property stock is housing however, with Gosforth becoming ever more popular for renters and those seeking to get onto the property ladder, apartments are in short supply and highly sought after. As one of Newcastle’s most-desirable suburbs, its property market is home to some of the most luxurious, higher-end properties. Compared to the City Centre, where luxury residential apartments are in short supply, those looking for top tier property in Newcastle should use Gosforth as a benchmark.

Located on the other side of the River Tyne, Gateshead is a separate town from Newcastle. It is home to some of the region’s best attractions, including the Baltic Centre for Contemporary Art and the Sage music venue. Investors keeping a close eye on market trends will be interested in knowing that Gateshead’s investment levels rival what has been witnessed across Newcastle, with ties between the two locations strengthened through the £92 million Accelerated Development Zone.

One of the most hotly anticipated schemes set to complete in 2023 is the new £260 million Gateshead Quayside, which will create a world-class arena, exhibition centre, and hotel complex. Once completed, the attraction expects to attract an additional 400,000 visitors and add £60 million annually to the local economy. However, it is not just the waterfront that is witnessing a revival. Gateshead has also benefitted from a wave of new jobs and business opportunities created by Amazon’s commitment to 2.5 million sq ft of warehouse space in the town. As packaging suppliers and related industries take up warehouse space close to the fulfilment centre, more jobs mean an increase in workers, which naturally will fuel the demand for housing in Gateshead.

A key benefit for residents and property buyers alike is Gateshead’s proximity to Newcastle (accessible via road and Metro), but housing and general living costs are considerably lower. Property investment in Gateshead provides excellent value for money. With levels of investment in the riverside town continuing to rise, investors could stand to see their money go further whilst securing similar levels of growth. Taking all these factors into account, Newcastle’s private rental sector will continue to offer great potential for investors to secure regular returns and achieve capital growth in the years to come.

Property investment in Newcastle

Newcastle is a market our team has kept a close eye on over the last few years. With multimillion-pound regeneration projects, improvements to transport links, plus the nearing completion of some of the most hotly anticipated projects, including the Helix and Gateshead Arena just a few years away, we think the investment case in Newcastle will likely gain momentum. Investors looking for property in an up and coming market like Newcastle should consider entering at the earliest stage.

Those considering property investment in Newcastle should contact the experts from Surrenden Invest for information about our high-performing projects in the city. With over 2,000 properties sold with a GDV of £500 million, the property professionals at Surrenden Invest are uniquely positioned to advise on buy-to-let opportunities.


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Named the UK’s most loved city, Newcastle has emerged as a lower entry level property hotspot. With a robust 5-year forecast, learn why Newcastle offers exceptional growth potential.

 

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