Thursday, 16 April 2015

The Average Sunderland Sold Price is Now 65% More Than in 1995

Following on from the earlier post about pension reforms (and how Buy to Let in Sunderland stacks up as a long term way to fund your retirement) it's interesting to look at how the average sold price of Sunderland properties has changed to see how your asset is likely to increase in value over time 

For most property investors looking to buy in Sunderland, they'll do so looking to achieve a decent monthly return (Yield) rather than achieve spectacular capital growth but even so it is worth noting how a property purchased 20 years ago will have performed since then

Looking at the graph below you'll see an initial period of falling prices, from an average sold value of £79,880 in January 1995 to a low of £70,990 in February 1997 

This is followed by a 3 year period of price stability until January 2001 then a steep increase to a peak average sold value of £180,201 in May of 2008

We all know what happened next...prices in Sunderland suffered in line with the rest of the UK, falling sharply (by May 2009 the average sold price was nearly 20% lower than just a year earlier) with a continued decline until a low point of £129,127 in August 2013


Prices have remained steady since then, with small increase one month being followed by small decrease the next - indicative of a relatively fragile and uncertain market 

Despite what may be happening elsewhere there is certainly no indication of another major house price boom in the offing in Sunderland (with most commentators suggesting uncertainty over the forthcoming General Election will ensure prices remain flat throughout the key summer sales period in 2015) 

With the boom and bust cycle now hopefully behind us, it is worth noting that Sunderland prices have settled down at around 65% more than in 1995 and throughout the late 1990's and early 2000's

Whilst the above graph shows that it is inevitable that house prices will rise over the long term, investors should base their long term investment decisions on achieving moderate long term capital growth rather than the double digit boom (from 2001 to 2008) and bust (from 2008 to 2013)

With this in mind, an area such as Sunderland, which offers better-than-most Yields combined with the ability to rent to good, working tenants (rather than having to rent to non-working tenants in order to receive LHA payments in excess of market rents) should hopefully continue to be attractive to canny investors

If you want to find out more about the Sunderland property market feel free to give me a call on 0191 567 8577, pop into our Frederick Street office or email neil.whitfield@belvoirlettings.com


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