Newcastle, Gateshead and the surrounding North East region are quickly becoming some of the main target locations for buy-to-let property investment in the UK.
Since the 1990s, Newcastle has shifted its focus, creating a vibrant and busy city with a growing, 21st-century economy centred around retail, culture, education, and science. The local population is young and active, making it the perfect canvas for buy-to-let investors.
Whether you prefer to market to students, young professionals, or young families, Newcastle offers a diversity of locations and property investment opportunities that are suitable for all budgets.
Overview
The city of Newcastle has a long, varied history, first appearing as a Roman settlement under Emperor Hadrian in the 2nd century AD. The Romans are long gone, but their settlement has since evolved into the most populated city in northeast England and a major player in the UK’s industrial revolution.
During the Tudor period, a royal act gave Newcastle a monopoly in the coal trade, contributing to the city’s development. Coal production remained the pillar of the city’s prosperity throughout the Industrial Revolution, with heavy engineering and shipbuilding. Local inventions count the miner’s safety lamp, the steam turbine for marine use and power generation and a hydraulic crane.
The decline of heavy coal-based industries led to abandoned warehouses and buildings in the second half of the 20th century. In the 1990s, local governments produced a new master plan to help the city move away from its industrial past and focus on the riverside again.
Newcastle was also counted among the country’s largest print centres, establishing the foundations of Newcastle’s science and education. This has paved the way for Newcastle’s university and research life, including Newcastle University and Northumbria University.
The modern shift in focus has led to the redevelopment of Newcastle’s formerly derelict quayside and the restoration of the historic city centre. The Georgian Grainger Town project, designed to regenerate the area, has attracted over £174 million in funding. Through the project, the city restored and increased the confidence and profitability of the area, creating new jobs, attracting over 280 new businesses, and improving commercial and residential floor space.
Excellent transport links are available through Newcastle Central Station and the Metro system, which stretches out as far as Newcastle International Airport and the urban outskirts.
Tripadvisor Travellers’ Choice Destination Awards ranked Newcastle third in Europe and seventh worldwide. With nightlife destinations such as the Gate venue for entertainment and Collingwood Street with its high-end bars, it’s fair to say those awards are well deserved. Newcastle’s thriving nightlife is worth around £340 million annually.
The city is now home to many reputable businesses that attract professional talent to the city, including Greggs HQ, BBC North East and Cumbria, and the UK’s first biotechnology village: the Centre for Life. Yet the most significant economic pillar for Newcastle is its retail sector, ranking the city in the top 10 retail centre expenditure in the UK and one of the most attractive destinations for shoppers.
Why is Newcastle a Good Choice for Property Investors?
The average price of a home in Newcastle is £214,404 as of June 2023, which is comparatively much lower than in the rest of the UK property market. This makes Newcastle one of the most cost-effective cities to invest in for prospective landlords.
The average rental income in Newcastle is around £1,023 pcm, with the median rent being £825 pcm, although naturally, this varies depending on location. Even so, Newcastle, and the North East in general, are generating some of the strongest rental yields in the country right now.
For property investment in Newcastle, we recommend focusing on the most popular and desirable parts of the city:
Top 10 Buy-To-Let Areas In Newcastle By Rental Yield
So, which are the best postcodes to consider when investing in Newcastle rental property? Using industry data on postcode performance, we’ve identified ten property investment hotspots for buy-to-lets in the local area based on rental yield. Here are the results:
| Postcode | Avg Asking rent (pcm) | Avg Yield |
|---|---|---|
| NE1 | £977.00 | 7.40% |
| NE4 | £861.00 | 7.00% |
| NE6 | £943.00 | 7.00% |
| NE8 | £685.00 | 6.60% |
| NE63 | £561.00 | 6.30% |
| NE10 | £669.00 | 5.90% |
| NE33 | £582.00 | 5.70% |
| NE2 | £1,220.00 | 5.40% |
| NE15 | £760.00 | 5.30% |
| NE9 | £730.00 | 5.10% |
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NE1 – Newcastle City Centre, Grainger Town
With an average asking price of £158,649 and an annual rental yield of 7.4%, NE1 currently offers the best potential return for buy-to-let investors in Newcastle. It’s also a rare feat to find an area in which house prices have actually lowered over the past five years, decreasing by 3% since 2018. We’d go as far as to say that property is undervalued in this area, despite it becoming an increasingly sought-after destination for those willing to invest further north.
NE1 is home to Newcastle’s lively city centre, which offers a healthy mix of commercial, retail, culture, bars and nightlife options. Newcastle City Council have gone to great lengths to attract a diverse range of people, including professionals, students, and tourists. The lively atmosphere and amenities in the area make it an attractive location for tenants.
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NE4 – Bishopston, Gloucester Road
NE4 covers the areas of Arthur’s Hill, Fenham and Benwell to the west of the city centre. It also serves several of the main campuses of Newcastle University – one of the UK’s leading ‘red brick’ universities, boasting a student population of just under 30,000 students. It also covers the campuses of Northumberland University, which attracts even more students, roughly 32,000 per year.
Annual rental yields here sit at around 7%, whereas its average house price remains accessible at £147,701. As you’d expect, the area is a hotspot for student property investment and HMOs in the city. It’s also the home of several vibrant markets and shopping parades, including the historic Grainger Market, founded in 1835, and the Northumberland Street Market.
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NE6 – Walker, Byker, Heaton
Like NE4, the NE6 postcode also offers an attractive rental yield of 7% per year, albeit on the other side of the city. Even so, rental demand remains strong here due to the area’s easy links to the centre and universities. House prices have risen by 20% over the past five years, with a current average asking price of £162,338.
There are many parks and green spaces on the east side of the city, including Heaton Park, St Anthony’s Park and Armstrong Park. Projects such as the Byker Wall regeneration and improvements to local infrastructure aim to enhance the quality of housing and amenities in the area. This will likely lead to further capital growth and increased property values in the area over the coming years.
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NE8 – Gateshead, Bensham
Crossing over the iconic Tyne Bridge opens up a wealth of opportunities for property investors in the Gateshead area. House prices – £124,758 on average – are more accessible compared with other areas of the city, yet the rental yield of 6.6% remains strong enough to make the investment worthwhile.
Gateshead is another area that’s seeing steady development, particularly around the Gateshead Quays area, the Sage Gateshead music venue and the Baltic Centre for Contemporary Art. All of these projects have enhanced the area’s appeal and opened the door to further investment and regeneration.
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NE63 – Ashington
For those looking for a fantastic entry point, NE63 offers the most affordable Newcastle property prices out of all of our top 10 postcodes – with an average of just £106,680. The postcode serves the area of Ashington, which is roughly 40 minutes by car to the north of the city and close to the beautiful Northumberland countryside and coastline.
There are also good transport links by bus, which makes the area a popular choice for professionals who want to escape the hustle and bustle of the city after their workday ends. For landlords, the rental income of 6.3% certainly has appeal, and it’s almost certain that house prices will continue to rise over the coming years as more and more potential rental properties are snapped up.
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NE10 – Heworth, Felling
NE10 is in the Gateshead borough and well-connected to both Gateshead and Newcastle City Centre by bus and train, with the local station at Heworth a popular transport option for commuters.
This area offers a range of housing options, from apartments and terraced houses to larger family homes. This diversity allows investors to cater to different preferences and target different segments of the rental market. House prices have risen by 15% over the past five years, which is a good indication that the neighbourhoods here are becoming increasingly in demand.
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NE33 – South Shields
South Shields is another popular choice for those looking for options a little further outside of the main city centre. Many are drawn by its coastal location, offering residents easy access to beautiful beaches, promenades and stunning coastal scenery. It’s a great option for those looking for a seaside lifestyle and outdoor recreational activities.
House prices – on average £123,138 – are definitely lower than what you’ll find in Newcastle. However, the fantastic range of train and bus links means that it only takes 30-40 minutes for those that work in the city, or just an hour by bike for those that wish to cycle in.
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NE2 – Jesmond
You’ll find NE2 to the northwest of the city centre, covering part of Jesmond. This is one of the most sought-after areas of the city though also one of the most expensive, with properties commanding an average asking price of £270,390.
The area is renowned for its mix of period properties, Victorian terraces and modern apartments, which attract a diverse range of tenants and strong rental demand. One of the best attractions here is the Town Moor Park and Gardens, a wonderful green area that is perfect for walking, exercising and other recreational activities.
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NE15 – Westerhope, Lemington, Heddon-on-the-Wall
NE15 is located to the west of the city and offers excellent suburban countryside appeal for families and professionals. House prices in the quaint neighbourhoods and villages here are still on the expensive end – £171,960 on average – though still much less expensive than Jesmond.
Again, many people choose this area because they’re looking to enjoy quieter surroundings and the open, green spaces of the Northumbrian landscape, yet still with an easy route into the city whenever needed.
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NE9 – Beacon Lough, Low Fell
Last but not least, NE9 in Gateshead covers desirable residential areas such as Low Fell, known for its attractive Victorian and Edwardian houses. The area offers a pleasant suburban feel with tree-lined streets, parks and green spaces, all of which have a distinct charm. It’s also not far from the famous Angel of the North, one of the most recognisable landmarks in the UK.
Despite the fact that NE9 comes in at number 10 on our list, the rental yield of 5.1% is still a solid option for landlords who are looking to invest with a particular type of property or location in mind. The A1 and A167 provide easy access to Newcastle, Gateshead, and other nearby areas, and residents are well-served by public transport.
Thinking about buy-to-let investment properties in Newcastle?
If you’re looking for an affordable UK city with a thriving rental market, Newcastle could be the perfect choice for your next property investment. Feel free to get in touch with our friendly team to discuss your situation and the main objectives for your next investment.
NB. The data in this article is an accurate representation of the Newcastle property market as of June 2023. We’ll review statistics and update this report next year, in 2024, with fresh data.
