Looking first at the number of available properties as before, there are no significant changes to the January figures, with the SR1 postcode again showing significant oversupply, SR2 having the smallest shortfall and the other areas showing shortfalls of around 2 - 3% (based on the accepted wisdom that 5% of all rented properties should be available at any given time)
I would anticipate the above trends will continue, given there are no significant new build developments within the City that would dramatically alter the rental stock
Looking at tenant demand, I've analysed Rightmove data to identify the number of searches conducted on the site within the last month - whilst this only includes Rightmove and doesn't include the other portals such as Zoopla or the new OnTheMarket.com, Rightmove is by far the most popular site for both Sales and Lettings in Sunderland, so it would be fair to assume any trends shown here would reflect the market
There were 90,399 searches carried out for rental accommodation in Sunderland where the searcher specified the property type they were looking for - of those 90,000 searches, 38% were looking for Houses, 34% Flats/Apartments and 28% Bungalows
Looking at those who specified their preferred price range, it's unsurprising to see that 45% of all searchers were looking 'upto £600pcm' the average rent in Sunderland being £591pcm
Perhaps more surprisingly, the data shows 36% of searchers were looking 'upto £800', which will include those looking for the majority of larger, higher quality family homes in Sunderland without getting into the realms of exclusive executive properties which would be unaffordable to most
When searchers specified the minimum number of bedrooms, 43% required a minimum of a studio/1 bedroom, 19% were looking for a minimum of 2 bedrooms, 15% 3 bedrooms, 12% 4 bedrooms and 11% 5 bedrooms or more
Taking a moment to consider the above it's unsurprising that 43% of renters may be looking for a 1 bedroom property and to me it's equally unsurprising to see that over 25% of all searchers were looking for 3 or 4 bedroom homes - this again backs up the established view that in Sunderland demand clearly outstrips supply for larger family homes
Rightmove also allows analysis of tenant searches to be further broken down by named area, it doesn't do so on a postcode basis, so the following table isn't going to exactly match the postcodes on the Supply table above, but it should be pretty close...
The above data reveals some expected results, such as around 30% of potential tenants specifically looking for accommodation in the City Centre and SR2 (so whilst there is clearly oversupply in these areas it would be wrong to assume there are no tenants looking to live there, just not quite enough...)
It also reveals a very unexpected result in that 39% of searchers who specified an area were looking in the SR6 area - the area with the second fewest rental properties in Sunderland! This is clearly going to be of interest to investors, as there appears to be significant demand that is currently not being met
This also poses some challenges, the SR6 area being one of the most expensive in Sunderland and therefore being outperformed by many other areas in terms of potential yields - in the past this has put many investors off but perhaps it may require a rethink, as it may be worth considering the area (known for offering the best capital growth potential) on this basis and in anticipation of long term tenancies and minimal voids
Marry this with the data showing the demand for larger homes and it may lead investors to consider 3 or 4 bedroom properties in SR6 that they ordinarily would have rejected due to comparatively poor yields
Whether you're thinking of investing in Sunderland for the first time or are now considering adding to your portfolio, for a free, no obligation chat about the Sunderland Property Market please give me a call on 0191 567 8577 or email neil.whitfield@belvoirlettings.com
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