The Tyne Bridge stands steadfast as the first working week of 2026 begins, its lights fading into a crisp January dawn. The North East enters the new year not with uncertainty, but with quiet confidence.
While national headlines debate interest-rate paths and stamp-duty timelines, the region’s fundamentals remain rock-solid. Gross rental yields closed 2025 at 8.13% region-wide (Paragon Bank Q4 2025), with the top-performing micro-markets consistently clearing 10–11%. Early January data shows no slowdown: enquiry volumes for buy-to-let properties are up 9% versus January 2025, and void periods across our managed portfolio average just 7.4 days.
The reason? Four forces that show no sign of weakening:
-
Chronic tenant demand – student numbers at Newcastle, Northumbria, Durham, Sunderland and Teesside universities continue to rise; graduate retention in the region is at record levels.
-
Corporate relocation pipeline – Nissan, Britishvolt legacy projects, Netflix studios and emerging tech clusters keep pulling skilled workers who rent before they buy.
-
Infrastructure tailwind – Quayside Phase 2, A19 upgrades, and Tees Valley rail improvements are shortening commutes and elevating previously overlooked micro-markets.
-
Unrivalled affordability – average North East house price £151,000 (ONS Q4 2025) remains 47% below the UK average, shielding the region from rate sensitivity.
Current micro-markets still delivering 10%+ gross yields (January 2026 live data):
-
SR4/SR5 (Sunderland) → 10.5–11.2%
-
NE28/NE29 (Wallsend/North Shields) → 10.2–10.9%
-
DH4/DH5 (Houghton-le-Spring) → 10.1–10.8%
-
TS1/TS3 (Middlesbrough central) → 10.0–10.7%
Early 2026 signals are positive:
-
Mortgage approvals in the North East rose 6% month-on-month in December (Bank of England)
-
Two-year fixed buy-to-let rates dipped to 4.38% average (Rightmove, January 2026)
-
Institutional interest is rising — two major funds confirmed North East allocations in Q4 2025 investor calls
The result? Off-market deals are moving faster than ever. A £168k terrace in NE28 acquired in late December, £28k HMO conversion budgeted for Q1, already pre-let at £3,100 pcm — projected gross yield 10.9%.
For investors sitting on the sidelines waiting for “clarity,” the message is clear: the clarity is already here. The North East isn’t waiting for permission to outperform — it’s doing it.
2026 isn’t a reset.
It’s an acceleration.
The best micro-markets are still wide open — but not for long.
Secure Your 2026 Edge
Want the exact postcodes, live rental comps, and off-market deals still delivering 10%+ this quarter?
Join the 1,200+ investors already receiving them every Thursday.
→
Here’s to a prosperous 2026 from all of us at Mike Bells Property Sourcing.
#propertyinvestment #northEast #rentalyields #2026outlook