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.

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.

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.

What does the Sunderland Property Market Look like Post COVID-19?

While it took many of us some time to adjust to the changes imposed by COVID-19 and the regional and national lockdowns, the same can’t be said of the Sunderland property market. Once things returned to normal the property market has continued to go from strength to strength, with people looking for homes that have their most desirable features.

Last year many experts believed that the stamp duty break would artificially stimulate the market and that house sales would fall once it had ended. However, that has not transpired over the past 12 months as buyers have continued to take advantage of Sunderland’s ongoing redevelopment and comparatively low market prices.

After two years living under restrictions, people have been eager to embrace the outdoors once again and that is reflected in recent house buying trends. Many are eager to live nearby to big open spaces, be it in suburban areas such as Tunstall or Barnes or on the coastline near to the sea and beach.

There is a strong appetite to get away from the city centre, with houses with gardens and easy access to green spaces at the very top of many people’s wish lists. The pandemic provided time for people to reflect and re-prioritise in their lives, and with many professionals now having the option to work from home on a regular basis, the need for increased space is more important than ever.

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

Since the start of the pandemic, property prices in the UK rose by 20%, but in Sunderland it could be argued prices rose by 30%, as the market continued to flourish both during and after the lockdown period.

Over the course of 2022, industry experts are confident that prices will continue to rise by 7%, which is higher than the 5% initially projected at the start of the year. This means prospects for the immediate future still look very positive.

Naturally, there is some concern about rising inflation, although a longer-term view should be taken to get a better understanding of it might affect the property market. Rising inflation will likely see property values increase, as will development costs due to rising material prices. With less new houses coming to market, this usually means higher prices for properties as demand continues to outstrip supply levels.

Borrowing also tends to increase during an economic downturn, which gives people more financial support to get onto the property ladder. Some key mortgage regulations also came into effect on August 1st, 2022, as lenders are no longer legally required to ask borrowers to complete affordability tests. This will prove particularly beneficial to first-time buyers over the next few years.

Sunderland’s housing market has continued to grow over the past few decades, and it would be sensible to believe that trend is likely to continue for the foreseeable future. Of course, there should always be a note of caution as we have seen in the past few years just how quickly things can change, but as it stands, the future looks very bright for buyers and sellers in Sunderland.

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.