Wednesday, 4 February 2015

Sunderland Rental Returns Almost £11,000 Per Property in 2014

I met a nice chap from East Boldon last week, who popped into our offices on Frederick Street as he was thinking of investing in property for the first time

He had come into some money and after coming across this blog via a Google search, took me up on the offer of a chat about investing in Sunderland property and in particular was keen to find out more about the sort of return he could expect

I reminded him that Landlords who invest in property achieve a return on their investment in two ways

The first is their rental income, which is what the Tenant pays you. If you divide the annual rent into the total paid for the property, this is your Gross Yield

When a property increases in value over time, it is known as 'Capital Growth'. Capital growth, also known as capital appreciation, hasn't been too strong in recent times in Sunderland, but the value of property can go up as well as down, and of course the local conditions surrounding property will have a big effect

The average Gross Yield on for a Sunderland rental property stands at 5.5% a year, this is far better than can be achieved in many parts of the UK but represents only a modest increase of 0.2% from one year ago

Over the last 12 months, average property values in Sunderland have risen by 3%, so taking into account capital growth, total annual returns on an average Sunderland property stand at 8.5% over the twelve months to December 2014

In absolute terms this means the average Landlord in Sunderland has seen a return, before deductions such as mortgage payments and maintenance, of £10,931 in the last twelve months

This is made up of rental income of £7,092 and an average capital gain of £3,839

However, yields for new Investors are going to be tough to make ends meet when interest rates rise, so it’s essential new buy to let Landlords seek the best advice, buy the best sort of property, buy that property at the right price and factor in mortgage rates of five to six percent seen before the credit crunch

As I don’t sell property, I can look at the whole of the Sunderland property market and tell you what I would consider buying, without any conflict of interest - feel free to give me a call on 0191 567 8577 or pop into our Frederick Street office for a chat

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