Friday, 24 June 2016

61.3% of Sunderland Voters Voted to Leave the EU - What Now for Sunderland Landlords & Homeowners?’s been announced the UK will be leaving the EU and David Cameron has resigned

As most of the polls suggested a Remain Vote, it came as a surprise to most people, including the City. The Pound has dropped 8% this morning after the City Whiz kids got their predictions wrong and MP’s from the Remain camp are using words like “challenging times ahead”.

Now the decision has been made...what next for the 71,556 Sunderland homeowners - especially the 39,147 of those Sunderland  homeowners with a mortgage?

The Chancellor (as part of the Remain campaign) suggested property prices would drop by 18%. Using Treasury estimates, their method of calculating this was tenuous at best, but focused around the abrupt and hasty increase in UK interest rates, which in turn would raise the cost of mortgages, and therefore lower demand for property, causing a drop in property prices.… and I would say, theory that could happen

Sunderland  Property Values
Sunderland property values, which have been flat for the past 4 years, may drop a little in the coming 12 to 18 months – but by 18%!?

I find that way too pessimistic and believe that figure was rhetoric to get homeowners and landlords to vote in a particular way. But the UK property market is quite a monster

Since the last In/Out EU Referendum in June 1975, property values have risen by over 1,900%

That isn’t a typo! Whilst UK property prices did drop nationally by 18.7% between the peak of 2007 and bottom of the market in 2009, when one compares property values today in the country, compared to that all-time high of 2007, (the period before the financial crisis of the Credit Crunch of 2008/9) they are still 10.14% higher

Another Credit Crunch?
And so, notwithstanding the Credit Crunch, the worst global economic outlook since the 1930s and the recession it brought us, a matter of a few years later, the Government were panicking in 2012/3/4 that the housing market was a runaway train

Now the same Credit Crunch doom-mongers and Sooth-Sayers that predicted soup kitchens in 2008/9 are predicting Brexit meltdown. Bad news sells newspapers. Stock markets may rise, stock markets may fall, yet the British public continued to buy property in 2009/10 and beyond. Aspiring first time buyers and Buy to Let landlords dusted themselves down, took a deep breath and carried on buying…because us Brit’s love our Bricks and Mortar and we need a roof over our head

However, as mentioned previously, if the value of the pound drops, in the past UK Interest Rates have risen to reverse that drop. However, whilst a cheaper pound will make your jug of Sangria a little more expensive on your Spanish holiday this year and make your brand new BMW pricer .. it will make British export cheaper! Which is great for the economy

Interest Rates
Since 2009, interest rates have been at 0.5% and lots of people have become accustomed to those sorts of levels

So what if interest rates rise .. end of the world? Interest rates in the 1986/88 property boom were on average 9.25%, the 1990’s they were on average around 6.5% and uber-boom years (when UK property values were rising by 20% a year for three or four straight years across the UK) they were 4.5%

Many of you reading this who are in their 50’s and older will remember interest rates at 15%

But I suspect interest rates won’t rise that much anyway, as Mark Carney (Chief of the Bank Of England) knows, raising interest rates causes deflation – which is the last thing the British economy needs at the moment

In fact they have been printing money (Quantitative Easing) for the last few years (which causes inflation) to the tune of £375bn a month. A bit of inflation because the pound has slipped on the money markets (not too much mind you) might be a good thing?

Whilst property values might drop in the country, they will bounce back. It’s only a paper loss because it only becomes real if you sell. And if you have to sell, as most people move up market when they sell, whilst your property might have dropped by 5% or 10%, the one you want to buy would have dropped by the same 5% to 10%...and here is the best would actually be better off because the more expensive property you would be purchasing would have come down in value (in actual pound notes) by more than the one you are selling!

Sunderland Landlords have nothing to fear, nor do the 11,612 tenant households living in their properties

Buy to let is a long term investment. I think there might even be some buy to let bargains in the coming months as some people, irrespective of the evidence, or sound logic choose to PANIC!!!!!  

Even if we pull up the drawbridge at Dover and immigration stopped today, the British population will still increase at a rate that will exceed the current property building levels 

Britain is building 139,600 properties a year, but needs according to the eminent ‘Barker Review of Housing Supply Report’, the country needs to build about 250,000 properties a year to even stand still, and as the the birth rate is increasing, the population is living longer and just under a quarter of all UK households now are occupied by a single person demand is only going up whilst supply is stifled

You don't need to be an economics graduate to know that demand exceeding supply equals higher prices

So, what will happen next?

Well, there are many challenges ahead. The country has spoken and we are now in unchartered territory – but we have been through a couple of World Wars, an Oil Crisis, Black Monday, Black Wednesday, 15% interest rates and a Credit Crunch…and we survived! 

And the value of your Sunderland property? It might have a short term wobble…but in the long term - it’s safe as houses

Is There A House Under There? 3 Bed Semi To Add To Your 'Watch List' For A Possible Flip

This three bedroom semi is on a very sought after street but the ivy covering the entire front of the house and overgrown rear gardens may be offputting to many, so it might be one to keep a watchful eye on in anticipation of making a cheeky offer in due course

I'd view this as a possible Flip rather than a Buy to Let but I suppose that depends on the offer that's accepted - it certainly would attract tenant interest if that was the route chosen

There aren't any directly comparable sales recorded in this street on the Land Registry (the most recent sales are for a bungalow and more modern 1960's semi's) but given all the For Sale properties nearby are currently on the market for £200k or above if you can secure a discount then bring this up to a good standard I'd suggest there will be an opportunity for profit to be made

It's just gone on the market with Hackett's so click here for details and call them for a viewing 

If you'd like to talk to me about this property, Flipping properties for profit or any aspect of property investment in Sunderland please call me on 0191 567 8577 or email

Thursday, 23 June 2016

Sunderland Properties Are On The Market For 2 Months Less Than In 2015

Last year I looked at how long Sunderland properties remained on the market in 2015 compared to 2007. This revealed some startling figures showing that, on average, properties were on the market for three times as long in 2015 as they were in 2007. I've taken a look at the stats again and the Good News is that the time on the market has come down significantly across all Sunderland property types in the year to June 2016

In 2007 the average time that a Sunderland property remained on the market was 113 days - remember this was the very peak of the pre-crash market, with many properties being snapped up as soon as they were listed

When I compared this in June of last year, the average time on the market was 331 days, essentially 11 months 

There was some variation in property type, with detached houses showing the smallest relative increase from 148 days to 368 days, compared to Flats showing an increase of 263% from 122 days on the market in 2007 to 443 days in June 2015

When I looked at the June 2016 stats I was pleased to see that time on the market has come down across the board, with the average Time on the Market of 265 days, shaving just over 2 months off the Time on the Market compared to a year ago

Does this suggest that the Sunderland property market is in a healthier position? As I pointed out last year, Time on the Market and the actual Time to Sell are two very different things...

Vastly overpriced or unattractive properties that are never going to sell will skew the Time on the Market data in a way that does not affect Time to Sell data...which records the time between a property being first advertised For Sale and the sale completing

The average Time to Sell in Sunderland in June 2015 was 145 days compared to 134 days in June 2016

So it would appear that the significant (2 months) difference in the average Time on The Market is not translating into significantly speedier sales. Why is this?

I'd suggest that the Time to Sell data takes into account several factors over and above how bouyant the market is, such as the time taken for mortgage finance to be arranged and for the conveyancing process to be completed

With this in mind a Time to Sell of 145 days in 2015 or 134 days in 2016 still represents 4 - 5 months of which around 2 months of this (at least) will be for the sales process to be completed following an offer being accepted

With this in mind I would also suggest that the Time to Sell data very much represents the good quality, keenly priced properties in popular areas that are snapped up within the first couple of months of going on the market - the overpriced or unloved properties will still stick around and be picked up by the Time on the Market data

The figures seem to back this up, with properties priced at £100,000 to £200,000 having the shortest average Time to Sell of any price band in Sunderland (108 days), the relatively scarce three bedroom properties having the shortest Time to Sell (115 days) when you compare number of bedrooms and semi's and terraces having similar Times to Sell of 116 and 118 days respectively compared to flats & detached properties with longer, but similar Times to Sell of 175 and 174 days respectively

It's interesting to note that last year properties priced at under £100k had the shortest average Time to Sell in Sunderland (125 days) but this top position is now taken by the £100 - £200k properties

So what does this mean for investors? Well, just as there is a 'sweet spot' on the rent you will look to achieve when buying a property to rent out (£400 - £500pcm being the most popular search category for Sunderland tenants) an investor should always buy knowing their exit strategy and they would be well advised to buy properties that will sell quickly when the time comes to sell

For free, impartial advice on any aspect of the Sunderland property market feel free to give me a call on 0191 567 8577 or email

Wednesday, 22 June 2016

Three Bedroom Pallion Terraced Cottage (8.7% Gross Yield)

This three bedroom terrace is in a lettable condition and based on a very conservative £450pcm will return 8.7% Gross Yield

Given the shortage of 3 bedroom accommodation throughout Sunderland in general and given the location close to Pallion Metro station and only a short distance from the Royal Hospital, it should get interest from working family tenants

As mentioned above, £450pcm is conservative with £495 being realistically achievable - but looking at a worst case £450pcm rent and paying the asking price of £62k it will return 8.7% Gross Yield - negotiate a 10% discount and achieve the higher rent and you'd be looking at 10.6%

Click here for details then contact Your Move to arrange a viewing if you're interested

Give me a call on 0191 567 8577 or email if you'd like to chat about this or any aspect of the Sunderland property market

Monday, 20 June 2016

'Ready to Let' Two Bedroom Farringdon End Terrace (7.9% Gross Yield)

This is 2 bedroom end terrace is located in the popular Farringdon area and is in a lettable condition which should return 7.9% Gross Yield

It's priced at £75,000 and based on achieving a realistic £495pcm rent it will return 7.9% Gross Yield

Click here for details then contact Your Move if you'd like to arrange a viewing

Call me on 0191 567 8577 or email if you'd like to discuss this or for a free, no obligation chat about any aspect of the Sunderland property market