A Deep Dive into Sunderland Property Statistics over the Last Few Years | Peter Heron

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Sunderland City

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A Deep Dive into Sunderland Property Statistics over the Last Few Years

Sunderland is one of the north-east’s most popular cities to live in. It’s been an important regional port since the 14th century, when it gained its reputation from the trade of salt and coal. These days, while its nautical history is still in evidence, it’s better known as a thriving business hub, not to mention a great place to enjoy a night out with friends.

The property market is diverse in Sunderland. You can expect to find everything here, from sprawling Victorian mansion-houses to modern studio apartments, and cosy cottages to seaside terraced homes.

If you’re considering moving to Sunderland, it’s a good idea to find out about the houses in the area, and in particular, the local prices and buying trends. Here’s some insight into Sunderland’s property market over the last twenty years.

Sunderland property market since 2000 – a brief run-through

Sunderland has always offered homebuyers fantastic value for money; with properties being well below the national average. However, the market has experienced significant growth over the last twenty years – with average home prices rising by over 187%.

The most accelerated period of growth was from 2000 to 2008, then, when the UK economic crisis kicked in, property values temporarily fell. Since that time, prices have mainly risen, though the recent political events (not to mention the pandemic) have had some impact.

The 21st century to 2008 – Sunderland’s market booms

Prior to 2000, Sunderland’s average property prices were slowly, steadily rising in value. At the turn of the 21st century, this rate of growth started to accelerate noticeably. For example, in 1995, an average detached home in the city cost around £90,000. By 2000, this had risen to approximately £115,000; a £25,000 increase. The same trend was evident in apartment prices, though was less prominent in terraced / semi-detached houses.

From 2000 to 2008, property in Sunderland rose sharply in value. The average detached home, which started the century at around £115,000, increased to a record high of £300,000 by 2008. Average semi-detached houses rose from about £50,000 at the start of 2000, to around £130,000 by January 2008; and terraced properties climbed from £35,000 in 2000, to £100,000 in 2008.

This boom was no less noticeable for apartments either. In 2000, the average flat cost about £30,000, and by 2008, this had spiked to nearly £130,000. In fact, during this time, apartments were often more expensive, due to the new developments being built in the area, which offered luxurious flats in appealing city-centre locations.

The rise in property values was mainly fuelled by elevated buyer demand, with average numbers of sales increasing year-on-year until 2008.

2008 – the housing crisis hits the UK

Few events over the last few decades have impacted the property market as much as the 2008 financial crisis.

The infamous ‘credit crunch’ made lenders wary, which meant far fewer people were able to take out mortgages. For example, in September 2008, 102,000 new mortgages were agreed; a month later, this had tumbled to just 88,000. People also lost their jobs during this turbulent year, which further impacted volumes of sales.

According to a Nationwide survey, UK house prices fell by 15.9% that year. The average price-drop for the north of the country was 11% - less severe than other locations, but still a sizable plummet.

As you might expect, numbers of property sales took a dive in 2008 in Sunderland. For example, sales of apartments became almost non-existent around this time. Values were also affected. Detached homes suffered the worst, with average prices falling from around £300,000 in 2008, to just £150,000 a year later. Apartments didn’t fare much better, though semi-detached and terraced property prices managed to remain relatively stable.

Sunderland Museum

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The recovery period – and the introduction of 3% stamp duty

After 2008, Sunderland’s property market stabilised. Although average detached home prices failed to climb back to the peaks of 2008, they rose steadily, reaching around £230,000 by January 2014. Average semi-detached and terraced prices remained about the same from 2008 to 2014, and apartment prices took a slight downward turn.

However, while sales of detached properties dropped after the financial crisis, they recovered fairly swiftly, then remained stable until 2014. The same trend was evident for terraced and semi-detached houses, and again, volumes of sales for apartments fell slightly.

The recovery of the market was supported by two government incentives; the removal of stamp duty for first-time buyers, which was introduced in 2010, and the Help to Buy Scheme, which was brought in three years later. It also helped that Sunderland’s properties were often priced at below £125,000, which meant no stamp duty for anyone, regardless of whether they were a first-time buyer or not.

Stamp duty changes and the Scottish referendum

The 2014 stamp duty changes also boosted Sunderland’s market. Prior to this time, properties were placed in stamp duty tiers. That meant that someone purchasing a detached home for £249,000 would pay £2,490 in stamp duty, whereas someone else buying a house for £250,001 would be charged over £7,500.

This original system distorted the market, resulting in lots of property sales being ‘bunched’ just below the stamp duty thresholds. The revised stamp duty tiers meant that the tax was applied in a similar way to income tax – so homebuyers purchasing a £250,000 house would pay no stamp duty tax on the first £125,000 of the property, then 2% on the remainder.

Another major event that could have impacted Sunderland’s house prices was the Scottish referendum, which also happened back in 2014. Had Scotland voted in favour of independence, this may have impacted the property market, given its proximity to the border. However, the Scottish people voted to remain in the UK, and as such, homebuyer confidence was restored.

The impact of the EU referendum

In 2016, the EU referendum took place, and Sunderland was a predominantly Brexit-voting area, with over 61% of people voting to leave.

Initially, industry experts predicted Brexit would have a negative impact on the UK’s property market. Ex-chancellor George Osborne stated that leaving the EU would cause house prices to plummet, and average mortgage costs to rise.

However, while the referendum results had an impact in other parts of the country (notably London), it didn’t really affect the property market in Sunderland. House and apartment prices remained fairly stable, and average detached home prices even started to rise after 2016, reaching £275,000 by 2019. This was nearly as high as their record peaks of £300,000, before the 2008 economic downturn.

Apartments were the only type of property that struggled in the wake of Brexit. Average flat values continued to dip somewhat, and were certainly nowhere near their previous highs of £175,000 in 2009.

2019 – plenty of opportunities on the market

Sunderland’s property market remained fairly buoyant in the wake of the EU referendum, defying the downward trend that other parts of the country were experiencing. In fact, detached homes continued to rise slowly in price, and terraced and semi-detached houses maintained their value well.

There are a few reasons why this happened. Firstly, Sunderland’s ongoing regeneration work ignited interest in the area. More businesses moved in, bringing more jobs with them, and this drew more people to the city. The affordable house prices (among the cheapest in the UK) were also appealing, not to mention the chance to purchase a home close to the seaside, without paying an extortionate price tag.

Landlords were also turning their eye to Sunderland, thanks to the city’s high rental yields. The average yield was revealed to be 9%, which was considerably better than most other parts of the UK. Houses priced between £50,000 and £100,000 were especially popular, comprising 37.2% of all sales from November 2019 to October 2020.

Developers were busy in the area at this time too, and purchases of new-build homes were on the rise.

Sunderland River Wear

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The COVID pandemic arrives…

2020 brought with it an event that nobody saw coming – the COVID-19 pandemic. In January, Sunderland’s property market was performing well. Average detached property prices had soared back up to £290,000, semi-detached houses were experiencing a slight uptick in value, and terraced house prices were stable.

This all changed in March 2020, when the country went into lockdown. The impact on Sunderland’s property market was huge, with most estate agents practically ‘shutting up shop’ for several months. House viewings were banned, and virtually no offers were being made. As might be expected, this adversely affected property sales.

The economic implications of a long-term lockdown were also felt. Some workers in the city lost their jobs, or experienced salary cuts. Also, homebuyers were increasingly wary about taking on the financial commitment of a mortgage.

Thankfully, the situation was reversed in the summer. Chancellor Rishi Sunak announced a complete stamp duty break for buyers, against the purchase of all properties up to the value of £500,000. This generated a property-boom across the country, including in Sunderland. Viewings rose sharply after lockdown was over, and property prices started to recover accordingly.

The stamp duty holiday is only in place until 31st March 2021, so it’s anticipated that the surge of interest may decrease after this time.

2021 – looking to the future for Sunderland’s property market

Sunderland has proved itself to be incredibly resilient in recent years. Land registry data shows that, despite the pandemic (and the turbulence of Brexit), average house prices are still on the rise.

The recent announcement that a COVID vaccine has been discovered has also alleviated uncertainties regarding future lockdowns. With the workforce returning to normal, businesses should recover swiftly, and more people will be looking to invest in property again.

The stamp duty break stimulated the market considerably, and some experts predict that house sales will dip slightly again after March 2021. However, interest in Sunderland property remains high, thanks largely to the area’s continued redevelopment, and the affordability of the homes here.

As such, purchasing a property in Sunderland in 2021 makes good financial sense. It’s one of the few areas where prices continue to rise steadily, and by buying sooner rather than later, homebuyers can generate future profit in the form of capital growth.

What’s on the cards for the next five years?

Experts predict that Sunderland property prices will continue to increase over the next few years. Although the pandemic may temporarily cause house values to fall after March 2021, this is unlikely to remain the case for long.

Local agents have noticed elevated interest in specific areas of Sunderland; particularly those on the coast, such as Roker and Seaburn. Quieter locations like Fulwell are also becoming more desirable, as is Whitburn, which is a scenic rural spot on the outskirts of the city. The city centre itself is likely to become more popular too, thanks to the regeneration works taking place here.

The property industry as a whole agrees that buyer priorities may shift in the next five years. Lockdown forced many people to re-evaluate their existing homes, and common complaints often focused on a lack of outdoor space, and no home-office.

As a result, it seems probable that homebuyers will be searching for Sunderland properties that have generous gardens and room to work from home if required. Of course, it’s difficult to predict the future with any certainty, but expert opinion suggests that the north-east is a great area to invest in now, and that Sunderland’s properties should be a serious consideration.

Sunderland Winter Gardens

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Are you looking to purchase a property in Sunderland?

Sunderland is an excellent place to call home. With solid employment opportunities, fantastic attractions and good amenities, it’s got something to offer homebuyers of all ages. Peter Heron have a wide range of properties available to buy in the area; from large family houses, to contemporary studio flats.

If you’d like to find out more about living in Sunderland, or you’d like some information about the best areas, school catchment areas or transport links, get in contact with the Peter Heron team today.

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