Tuesday, 17 February 2015

Sunderland Rental Market Stats January 2015

In November of last year I looked at the number of properties available to rent and compared this to the total number of rental properties in each area to identify any areas of over supply or shortfall - I thought it now worth revisiting this analysis for January 2015 to see if there have been any significant changes

Remember that it's generally accepted within the industry that around 5% of the total property stock will be on the market To Let at any given time, so using this it's easy to see which areas have a shortfall of properties and which are over-supplied at any given time

Let's remind ourselves of the situation in November 2014

Having undertaken the research again for January 2015 it's telling that there are some significant differences

The first thing to note is that once again there is oversupply in SR1, and this has doubled from an oversupply of 2.4% to 5.2%

All other postcode areas show shortfalls in January, this includes SR2 which has for many years suffered from oversupply of flats and apartments 

Tellingly SR2 shows the smallest shortfall, both in real and percentage terms, but even so it may represent a significant shift in the rental market in Ashbrooke and the surrounding areas within SR2 

The other areas haven't showed such dramatic shifts,  still showing shortfalls in the number of available properties of between 2 - 3%

This analysis is useful as it can inform you as to the likely market conditions and therefore allow Landlords to base their decisions (such as whether to put the rent up) from a position of knowledge rather than just gut feel 

For example, if I had looked at the figures following the housing market crash in 2008 when large numbers of 'Reluctant Landlords' had put their properties on the rental market for the first time, it would have clearly showed over-supply way in excess of the figures above in most areas - I'd suggest it would probably show double digit percentages of over supply

What this really meant on the ground was that we experienced tenants knowing they were in a position of strength, that they didn't have to choose second best and that they could negotiate a hard bargain on the rent - you can see the same happening in the City Centre at the moment with rents falling and Landlords having to continually improve standards to stand any chance of getting (and retaining) a tenant

Flip this on its head and I'd argue that a shortfall of 2 - 3% in most outlying areas at the moment means it's more of a Landlords market but still it's not sufficient for Landlords to start proposing significant rent increases without risking losing tenants or having empty properties

Clearly this analysis simply looks at the supply side and takes no account of demand led factors 

Anecdotally, January is a bit of an odd month in the rental market with high demand for flats at the start of the month from people going through relationship breakdowns over the stressful Christmas period (I'm serious!) but with a noticeable lull mid month as everyone feels the financial cost of Christmas and is waiting until the end of the month to get paid

With this in mind we'll take a look again at the supply situation next month in the meantime I'll also carry out separate analysis on the demand from tenants (although this is much harder to calculate!)

For more information about property investment in Sunderland, give me a call on 0191 567 8577, email neil.whitfield@belvoirlettings.com or pop along to our office in Frederick Street

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