Horizon in Sunderland is finally finished and completed. This development has been in high demand and now we're selling the last few units. Michael Johns covers why this development has been so popular, why Sunderland is a great area to invest in and how to grab your own unit before it's too late!
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Please see below the full transcript of the video:
Hi, Michael Johns, Residential Estates, reporting from home in these difficult times.
We’re seeing a huge amount of investments still, particularly from the foreign market, with the exchange rate so favourable for foreign investors. This means that there is, really, a shortage of affordable units for investors in the market, particularly those cash purchases of below £70,000. The development I want to talk about today is the Horizon development in Sunderland and I just want to give you a bit of inside knowledge into that development and why I consider now is such a good time to invest there, and why it’s such a good investment for a number of reasons.
Firstly, the development’s in SR1, so unlike a lot of cheaper-end developments, this is in the city centre, it’s not in the suburb, it’s close to the train station and it’s close to the city centre, so it’s a prime location for young professionals and students. There’s a real shortage of studios in the city. 90% of students are retained in the city after their studies so that puts a huge pressure on the housing market, particularly at the cheaper end. If you actually go and search for studios in Sunderland, you won’t find many at all and the prices of them, a lot of people are outpriced in the central housing market in Sunderland. Of course, if people are staying in purpose-built student accommodation while they are studying, at the end of their studies they have to move out, they can’t stay in there as a worker. So, they need something affordable, not something that’s very large, they need something that’s self-contained. Obviously, the options are HMOs which will cut down the prices, room shares – young professionals don’t like this, they don’t prefer that kind of model, they prefer to have their own kitchen, their own bathroom, and this is exactly why this development was converted from offices into affordable studios.
Now, saying affordable, these are at quite a high-end finish, they come fully furnished and they’ve got good facilities on-site as well. The facilities are a big attraction here, to a young professional to have their own room, their own kitchen, their own bathroom, as well as having a fully-furnished state of the art gym with ample parking, in the city centre is an absolute god-send in this market. These are small but they’re affordable and that is exactly what the market needs, so a lot of investors have said ‘well it’s only 50 grand, but they are very small’, well that is what the market needs. There’s no point in buying something that somebody can’t afford to rent out and that’s one thing we do here at Residential Estates is look at what’s available on the market and really what’s going to rent, not just now, but in the next 5, 10, 15 years.
These are ready to rent, they’re going to give you an immediate income, they’re completed. There’s a 9% rental guarantee for 3 years which means that you’re fully protected in those first 3 years. If your apartment is void for whatever reason, you still get your money and the first years money is held in escrow with the solicitor so it’s not a choice of the developer whether he pays you or not, that money is there ready and it’s released to you because that’s what you’re contracted to earn. The first quarter rents have already been paid to the owners direct. Obviously, we’ve already got a lot of investors who have already invested here, and they were very happy to receive a timely payment despite the current lockdown in the UK and difficulties with banking etc.
Jordan & Halstead are the lettings agent here, fellow Cestrians (meaning that we’re both from Chester), they’re the lettings agent but we’ve had calls from numerous other lettings agents asking whether they can take some of these apartments and they can fill any of the apartments or all of the apartments, they’ll take 10, 20, 30, whatever they can get their hands on. But actually, all of the apartments, currently, that are owned, are already let out. Well, you might think, why are the ones that aren’t owned let out? Well, we get a lot of people coming in to buy them for themselves and we can’t put a tenant in there knowing that somebody might come along and want to buy their unit for themselves. So, the very few units that we do have left that were from the developer’s portfolio that he released to us to sell on for him, all of those are available for homeowners, for themselves, people buying maybe as a crash pad if they’re working part-time in Sunderland, part-time in another city, which has been very popular amongst buyers as well, or just standard investors just wanting to add to the portfolio with an absolute no-brainer. This you can plug into any portfolio; it’s going to give you a guaranteed return. The only difference is, because of the price and the size of the units, they are cash-only, which is similar to a lot of student purchases.
The units that we have, we have corner units, we have sea-view units, we have town-view units, we have high-floor units left from £52,000 - £70,000. So, you’d be looking at just putting a deposit of £2500 down now and paying the rest on completion and then you’re immediately getting a return, so it’s really not going to land you out of pocket for a few years like an off-plan investment does normally. And again, these are fully completed and ready, all of them. So, you’d be getting a tenant and an income straight away.
Finally, I’d like to talk about the growth in this area because we feel that there’s tremendous growth options here. With it being a central location, it’s always going to be popular. Salaries are forever increasing in this city with the likes of Nike having moved in. All the companies are looking at moving into this area because they want to cut down their costs. We’ve seen a lot of companies do it from London to Birmingham recently, such as Deutsche Bank, Barclays, HMRC and more companies are taking an additional step to move further north to these newer university cities which have got a huge amount of talent coming through at affordable rates. Obviously, the average salary in Sunderland is a lot cheaper than it is in Birmingham which is a lot cheaper than it is in London.
So, it’s a tremendous opportunity as we see a levelling of prices in the UK. Sunderland is one of those areas where you can really make a big impact on your portfolio in terms of growth and an ever-growing rental return. So, we only have a limited number of these units left now, I’m coming out to you to basically say, if you’re interested in this, get hold of me as soon as you can to book your unit or to discuss further. I’m here to answer any questions that you’ve got, and you can contact me on the usual numbers, or you can email at email@example.com. I’m here to answer any questions that you have, and I look forward to hearing from you. Bye-bye.
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