Great Reasons to do business in the North East: Newcastle Building Society
Date published:
By Stuart Miller, Chief Customer Officer at Newcastle Building Society
I had the joy of visiting a new housing development, The Sycamores, in Stockton-on-Tees recently. I really enjoyed meeting Karl Morton, Sales Director for the North East for Keepmoat Homes who showed me around and explained the vision for the site and how it was providing opportunities for first time buyers to get on to the property ladder in the area. It was a joy, not only because it was one of the few times in the past 18 months that I’ve been able to step away from the home office for an in-person meeting (socially distanced of course!), but also because it was a thrill to see how things are changing in the town.
I grew up in Stockton, it was where I went to school, secured my first job, my parents have lived there for the past 50 years and my wife also works there, so I know it pretty well. But despite having spent so much time there, when I visited last week those sights and memories weren’t quite as familiar as I’d thought. It took a few minutes to realise that the development I was stood on was just a stone’s throw from the old swimming baths that I’d visited so many times as a child.
In short, the place had transformed. People have differing opinions on development and the built environment, but in a town like Stockton – and many others across the north east – investment into bricks and mortar is breathing new life into our communities. Whether its homes, offices, hotels, retail or leisure facilities, it’s the built environment which characterises our towns and cities and makes our region a great place to live. What was also obvious while visiting the site to see was how these new homes would provide a steady flow of new footfall on to the nearby High Street, providing much needed opportunities for new and existing local businesses to grow and prosper.
When it comes to housing, I think the north east is blessed. Not only do we have fantastic towns and cities with good transport connections, we have low housing and living costs. It makes the north east an incredibly ‘liveable’ place.
Where the average UK house price is currently around £242,000 in the north east it’s just £144,000 – considerably lower than any other region, and a world away from the £500,000 average in London. It’s well documented that since the start of the pandemic, house price growth has accelerated and although the north is no exception, it remains one of the lowest priced areas in the UK.
The cost of living in the north east is exceptionally low too – we spend around £499 per week on household costs against a UK average of £585.But what really makes the north east so liveable compared to other places is that even taking lower north east salary levels into account, housing is much more affordable than elsewhere. The average first time buyer in the north east can expect to pay just 20% of their take home pay on a mortgage, compared to an average of 32% across the UK and a whopping 57% in London. Think about how much difference that makes to a first time buyer being able to afford to live, socialise, save, travel, and perhaps feel like there’s more to life than working to pay a mortgage?
At Newcastle Building Society, it’s a fundamental part of our Purpose to help people own their own home. Although house prices are lower here than elsewhere, first time buyers – particularly those without access to the bank of mum and dad – might wonder how they will ever save enough to raise a deposit. Add to that rising house prices and it must feel like a target moving rapidly in the wrong direction.
For some, the latest government scheme, First Homes, will be an attractive option. We’re one of the first lenders to support the initiative, which offers first time buyers and key workers a discount of up to 30% on the price of a new home, helping to bring home ownership within reach of thousands more families.
Although government support is welcome, including the Help to Buy programme, and the mortgage guarantee scheme, it’s vital that industry itself plays a role in helping people get on and up the property ladder.
Regional caps on the Help to Buy scheme has made it less accessible and with the overall programme due to end in 2023, it’s up to lenders to come up with innovative, sustainable solutions for prospective buyers. Deposit Unlock is one such innovation, which we’re proud to have brought exclusively to the north east ahead of a national rollout later this year. Working with four housebuilders, Barratt Developments, Bellway, Keepmoat and Vistry, we’re the first lender involved and already offering competitive mortgages on quality new-build properties requiring just a 5% deposit from the buyer.
Whether those properties are in Stockton, Sunderland or South Shields, it’s worth remembering that every housing development means homes for families, new communities and opportunities for future generations. The dream of home ownership is powerful and although the streets and roads around us might change, the north east will continue to be a great place to live.