MARKET UPDATE
NORTH EAST
£297 £943m 48
Source: Dataloft by PriceHubble, Bank of England, HMRC, ONS
MARKET MOVING FORWARD
With the Budget delivered, greater clarity is helping to draw a line under recent uncertainty and allowing the market to move forward, supported by resilient transaction activity and modest price growth.
LOOKING BACK LOOKING FORWARD
At the beginning of the year, inflation was expected to fall to 2.7% by the end of 2025. However, it has proved more persistent than anticipated and is now forecast to finish the year at 3.5%¹. The Bank Rate remains at 4%, following the Bank of England’s decision to hold rates at its November meeting. There is a chance rates get cut in the December meeting but if not then, the next cut will likely be early 2026, with a further one predicted to take rates to 3.5% by end 2026¹. House prices have continued to hold steady over the course of 2025: the year began with expectations of 2.2% annual growth, and while projections have edged slightly lower, the market has continued to move forward, with prices now forecast to end 2025 at 1.8%, rising to 2.0% in 2026¹.
AUTUMN BUDGET
Chancellor Rachel Reeves’ Autumn Budget introduced a new mansion levy on properties over £2m from 2028, starting with a £2,500 surcharge. The levy affects only the top 0.5% of homes, with limited impact expected on the wider market. There was increased taxation for landlords with a 2-percentage point rise in property income tax from 2027. Concerns over the budget did take a toll on market sentiment particularly at the prime end of the market. With greater clarity around tax changes, activity should begin to pick up as the market shifts back toward its usual drivers.
MARKET ACTIVITY
Mortgage approvals, an indicator of future demand, held relatively steady in October ahead of the Budget, with 65,018 approvals recorded, only a very slight dip from
65,647 in September³. Despite a notable sense of caution and dent to overall market sentiment, transaction activity held steady as focused buyers and needs-based movers continued to progress. The number of homes sold in October rose to 98,450, up 2% on September but 2% lower than the same month last year4 . Activity is expected to strengthen in the New Year, particularly as the next interest rate cut materialises and given that the Budget measures proved less severe than many had anticipated.
STABLE PRICING
Despite sentiment headwinds in the run-up to the Budget and an increase in homes for sale compared with last year, overall property price growth has remained remarkably steady. Average prices in November increased by 1.8% year-on-year and by 0.3% month-on-month5 . In the North East, the prime markets of Hartlepool and Sunderland are currently the best performing.
GETTING THE PRICE RIGHT
Across the UK, the average gap between a property’s initial asking price and its final asking price stands at -2% 6 . Setting the right price from the outset is vital, as homes on the market for longer typically face larger reductions. Properties listed for 0–3 months see an average reduction of -0.6%, rising to -1.0% for those on the market 3–6 months. For homes listed for over a year, the average discount climbs significantly to -6.1%. In the North East, the average difference between the initial asking price of a property and its final asking price is -2.1%.
£535,000
£719,860 -0.4%
£377
£579,000
£752,303 -2.1%
£379
£476,000
£611,131 -4.1%
£330
£722,000
£944,043 -9.1%
£465
Source: Dataloft by PriceHubble, Land Registry.
£902,000
£1,253,040 -9.3%
£558
£423,000
£555,965 -0.8%
£297
£511,000
£676,152 -1.2%
£347
£527,000
£683,562 -3.3%
£331
£797,000
£1,058,109 -5.2%
£524
£1,430,000
£2,279,266 -16.7%
£1,144
NORTH EAST PREMIUM MARKET
£378,000
£461,316 -11.9%
£290
£417,000
£538,342 -6.6%
£316
£270,000
£335,765 -5.9%
£190
Source: Dataloft by PriceHubble, Land Registry.
£470,000
£624,695 -2.4%
£327
£400,000
£498,375 +1.5%
£255
£400,000
£538,549 +2.9%
£299
£390,000
£488,789 +2.5%
£243
£325,000
£414,401 +5%
£239
£340,000
£441,667 +16.1%
£222
£388,000
£527,849 +4.4%
£270
£392,000
£540,796 -0.7%
£271
NORTH EAST PREMIUM MARKET
NORTH EAST
Source: Dataloft by PriceHubble, Land Registry.
NORTH EAST
Source: Dataloft by PriceHubble, Land Registry.
NORTH EAST MAINSTREAM MARKET
NORTH EAST
Source: Dataloft by PriceHubble, Land Registry.
NORTH EAST
Source: Dataloft by PriceHubble, Land Registry.
£152,142
£423,000
£555,965
NORTH EAST
£164,777
£337,000
£442,910
£98,002
£250,000
£325,146
£110,969
£319,000
£419,778
£297,019
£612,000
£784,557
£159,370
£433,000
£569,648
Source: Dataloft by PriceHubble, Land Registry.