Thursday, 21 January 2016

There Are Double The Available Rental Properties In Sunderland Compared To A Year Ago

Following last weeks analysis of how the Sunderland sales market has changed within the last 12 months, this week I turn my attention to the Sunderland rental market

I compiled data in January 2015 by looking at the number of available rental properties in Sunderland and using the industry accepted assumption that 5% of all available stock should be on the market at any given time, I analysed the areas showing a shortage or over-supply of properties

I've conducted the same exercise using up-to-date figures and it makes for some interesting reading

The first thing to jump off the page is that, as the headline for this post states, there are currently 888 properties on the market to rent in Sunderland compared to only 375 this time last year

That's a massive increase in a relatively short space of time and as a result the situation changes from one of net shortfall (with 154 fewer rental properties than would be required to have 5% available in Jan 2015) to one of surplus, with 8.9% of the total rental stock available, representing a surplus of 359 properties

Overall this represents as swing of 513 more properties being available now compared to 12 months ago

Looking at the figures in more detail, large increases are shown in the SR2 area, with 297 available properties in 2016 compared to 119 a year ago and also SR4 with an increase from 85 to 221 properties

But by far the biggest increase in percentage terms is SR5, with only 38 available properties in 2015 compared to 128 in January 2016

Looking at the figures for 1 month in isolation will always lead to the potential for freak figures skewing the data however the 3 postcode areas above have shown such large increases that it suggests something rather than anomalous data for this month in particular

It is difficult to determine what has caused this increase in availability

In the case of SR2 and SR4 it could be due to the seasonal availability of student properties (it is a great & upredictable unknown when students come out of the woodwork each year) which are heavily concentrated more in these postcodes than others

It may be that there are many more available properties in SR5 due in part to this being seen to be a good value area to invest with a steady supply of good quality tenants!

Looking back at previous data, the SR5 area needed an increase in property to rent given the shortfall this time last year, however the worry is that the pendulum could have swung too far in the opposite direction 

It's very telling that in line with my advice over recent years, the largest 2016 surplus is being shown in the SR2 postcode area, worth 11.2% of the total rental property stock being available, representing a surplus of 164 properties

The worry is that over-supply is not good news for Landlords, given it affects the speed at which a property can be let, the cost of maintaining it (Landlords will be pressured to continually improve standards in areas with a lot of competition) and will potentially have a negative impact on the achievable rent

Whilst the rest of the country (especially the South East) have experienced rent increases this has not been the case in Sunderland in recent years as following the small dip post-2008 rents have remained flat at best - my worry is that should we experience sustained surpluses throughout Sunderland like the data above suggests it is likely to lead to significant rent reductions

Whilst I never thought I would ever say this, should this situation of over supply continue the predicted exodus of highly geared or amateur/reluctant Landlords in response to the "Landlord Bashing" measures could actually be a blessing in disguise for those Sunderland Landlords who do stick it out for the long term!

If you'd like to have a a free, no obligation chat about any aspect of the Sunderland property market pop into our 11 Frederick Street office, email or call 0191 567 8577

1 comment:

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