A new report from The Centre for Economics and Business Research (CEBR) has predicted that while property values are expected to show weaker growth for the rest of 2016 and into 2017, the average price of a UK home will still be around £40,000 more in five years' time - despite the uncertainty caused by the Brexit vote
Click here for the Daily Telegraph article discussing this report http://www.telegraph.co.uk/business/2016/07/28/house-prices-to-rise-40000-in-the-next-five-years-despite-eu-tre/
If this forecast does come true and such an increase occurred in Sunderland, this would see the average price of a Sunderland house rising from £132,720 to £172,720 in 2021
Of course the average price in Sunderland is much lower than the UK average house price (£194,000) so it would make sense to calculate the potential increase predicted in this report in proportion to Sunderland figures
At £132,720 the average price of a Sunderland house is 68.4% of the UK average house price, so applying 68.4% of the £40,000 predicted increase would still see the average Sunderland property price increase by £27,365 to £160,085 by 2021
That would still represent an increase of 21% over the 5 year period
An increase in house prices is all well and good as long as people can still afford them...
The average Sunderland salary is £20,592 giving an affordability ratio (the average house price divided by the average salary) of 6.4
To maintain this ratio the average Sunderland salary would need to increase from the current £20,592 to £24,916 in 2021
And what about rents? The average rent (discounting student properties & HMO's) in Sunderland is around £525pcm and if we were to assume that rents rose in line with the above, this would increase the average monthly rent to £635pcm
It could be argued that rents may increase over the next 5 years even without any house price or wage inflation stimulus as Landlords attempt to offset the increasing 'Clause 24' tax burden which will be phased in over the next 4 years
Ultimately the recent decision to exit the EU and the political fallout that has arisen following this has created a great deal more uncertainty about both the housing market and the wider economy, however it is encouraging to see a report from a respected source that suggests a positive outlook for the housing market post-Brexit
If you would like to discuss any aspect of the Sunderland property market please call me on 0191 567 8577 or email neil.whitfield@belvoirlettings.com
We would normally expect to come across 2 or 3 bedroom ex-council semi's in Grindon but there's also a few 2 bedroom flats and one has just come onto the market that looks like a good investment
It's on the market for Offers Over £52,000 and realistically needs a full refurb including new kitchen and bathroom...but having done so you could realistically expect to get £450pcm in rent
Based on that and a total spend of £65,000 it will return 8.3% Gross Yield
It's being marketed by Peter Heron so click here for details and call them for more information or to arrange a viewing https://www.onthemarket.com/details/2247183
Call me on 0191 567 8577 or email neil.whitfield@belvoirlettings.com if you'd like more information on this property or to discuss any aspect of the Sunderland property market
This three bedroom ex-council semi in Seaham is being advertised for £55,000 and with the potential to achieve £495pcm rent it looks worthy of investigation
It looks like it's in a 'Just About OK' condition which means it could be let as-is but I'd recommend putting in a new kitchen and putting a shower in the bathroom (which means you'll then need to spend a little on tiling or plastic panelling) to make it most attractive to Good Tenants
Based on paying the £55,000 and getting a reasonable £495pcm rent it will return 10.8% Gross Yield
Click here for details http://www.rightmove.co.uk/property-for-sale/property-55097788.html - it's being marketed by Express Estate Agency so call them for details (chances are, given they're a national agent based in Manchester you'll get to meet the owner at the viewing)
Call me on 0191 567 8577 or email neil.whitfield@belvoirlettings.com for more information
You may be tempted by the opportunity to buy this large terraced property split into four one bedroom flats given the £135,000 price and the promise of £16,500 rental income per year...
I'd not go so far as to say all investors should give it a wide berth but I would say anyone considering it should be very cautious and should know what they're getting into...
The street (Argyle Square) is one of the most notorious in Sunderland with the majority of properties being split into rented one bedroom flats or bedsits. Many are of very poor quality. Very few tenants are working. There are known drug problems and frequent reports of violence and antisocial behaviour.
The property itself looks to be very basic and in need of updating throughout, so you should factor this in as an additional cost
Anyway, for the right (experienced) investor going into this with their eyes wide open this could make a decent investment - the advert is from a Quick Sale estate agent and mentions the seller is a Motivated Seller so I'd suggest there may be scope to haggle on the 'Offers Over' £135,000 asking price
It's being marketed by GetAnOffer so click here for details and given the agent is based in Worthing I'd suggest you'll be meeting the owner http://www.zoopla.co.uk/for-sale/details/17739475
Call me to discuss this or any aspect of property investment in Sunderland - call 0191 567 8577 or email neil.whitfield@ belvoirlettings.com
This two bedroom ex-council semi in Silksworth is ready to rent and at £80,000 looks to give a decent immediate return but it's the potential to extend it that really caught my eye
It's situated on a large corner plot giving the potential to extend out to the side and also to develop the front of the property for car standing
Just looking at it as-is, with the £80,000 asking price and a predicted £495pcm rent it will return a decent 7.4% Gross Yield
If you look at the sold prices for the most recent nearby 3 or 4 bedroom sales, you'll see that there is the potential to profit from developing this property - to increase the rental return, allow you to remortgage at a higher amount to recycle your funds or simply to sell on at a profit
Click here for the most recent 3 bed sale http://www.rightmove.co.uk/house-prices/detailMatching.html?prop=45225322&sale=52916003&country=england
And here for the most recent 4 bed (extended) sale http://www.rightmove.co.uk/house-prices/detailMatching.html?prop=48195473&sale=52916006&country=england
This property is being marketed by Dowen's so call them to arrange a viewing or for further information http://www.rightmove.co.uk/property-for-sale/property-41884590.html
Call me on 0191 567 8577 or email neil.whitfield@belvoirlettings.com to discuss the potential of this property or any aspect of the Sunderland property market
At 'Offers Over £120,000' this 2 Bedroom Bungalow is a little more expensive than many featured on the blog but given the condition (it needs a full refurb) and location (it's a very sought after area very close to the Hospital) it's worth a look for those wishing to 'Buy to Sell'
The most recent sale in the street was for a similar property which went for £148,000 in April 2015 (this was done to a good standard - click here to see the property history http://www.rightmove.co.uk/house-prices/detailMatching.html?prop=47982547&sale=53758916&country=england
With this in mind, if you can negotiate a decent price and keep the refub costs down to around £15,000 it looks to offer the potential to make a decent profit simply by doing it up and selling it on
There is a large garden to the rear and also the potential for going up into the roof with a dormer so there is plenty of scope for those looking for a bigger project
It's on the market with Peter Heron so call them for info or to arrange a viewing http://www.rightmove.co.uk/property-for-sale/property-55013368.html
Call me to chat about the potential for this property or any aspect of the Sunderland property market - call 0191 567 8577 or email neil.whitfield@belvoirlettings.com
In the dramatic 2 weeks since the historic vote to leave the EU there have been many opinions offered as to the factors influencing the "Leave" vote but one piece of research by housesimple.com that caught my eye was a suggestion that the way an area voted was linked to house price growth. This inspired me to look into whether this applied to Sunderland?
Sunderland, like most areas in the North voted overwhelmingly to leave the EU, with 61% of Sunderland voters choosing to come out of the EU
Whilst undoubtedly the 'Leave' vote had many separate factors such as fears over jobs, immigration and the desire to claw back control from Brussels, not to mention the protest vote of wishing to register disatisfaction with the current political system - the houseimple.com research noted house prices in the 20 areas with the highest vote for Brexit have increased just 9% since 2011, compared to 18% in the 20 areas with the highest percentage of votes to Remain.
The following graph visually illustrates how the percentage of Remain vs Leave votes plotted against house price changes
Bizarrely Sunderland does not feature in the summary figures shown, despite the 61% vote being higher than 12 of the areas included, however putting that to one side, in Hartlepool and Burnley, which had the highest level of support in the country to leave the EU (69% and 66% respectively), the report states that house prices have fallen 5% and 8% respectively in the last five years.
I've done my own research and having done so I'd suggest the above are 'asking prices' which most clued up property people will know are really not the same as what properties are actually selling for
With this in mind I've looked at Land Registry sold price data for Sunderland, Hartlepool and Burnley then compared them to the English cities with the highest Remain votes, namely Cambridge, Brighton and Bristol, all of which had Remain votes in excess of 60%
I'm ignoring Scotland as the Land Registry doesn't cover Scotland and ignoring London as as it has had some of the highest and fastest house price growth in the country, and would skew the data. For example Hackney, in east London, where house prices have risen by 62% in the last five years, voted 78.5% in favour of Remain...
When looking at sold values, the 'Leave' areas of Sunderland, Hartlepool and Burnley in the last 5 years, Sunderland and Burnley showed sold values falling by 12% and 18% respectively with Hartlepool showing a modest increase of 2%
Compare this to the three top Remain areas where they all showed double digit growth, with Cambridge sold values increasing by 48% in the last 5 years, Brighton increasing 39% and Bristol by 35%
The report noted that "Many areas of the country, particularly in the North, haven’t enjoyed the boom times experienced in London since 2011, an area which voted strongly to remain in the EU.”
It is also telling that the other cities which voted Remain tended to have a young population, have retained graduates and have high levels of employment. These are also likely to have higher house price growth due to a high levels of demand which have outstripped supply.
With this in mind it would be overly simplistic to say that house price growth was directly linked to the way an area voted - Newcastle disproves this theory as it experienced the same 2% sold value increase as Hartlepool over the last 5 years but voted by the slimmest of margins 50.7% to Remain - however the housing market is a good indicator of the relative prosperity of an area which links back to the likely underlying feelings of it's population
If you'd like to have a chat about any aspect of the Sunderland property market feel free to give me a call on 0191 567 8577 or email neil.whitfield@belvoirlettings.com
