4 November 2026 · The numbers
What price works in your town
750 North East houses screened against real let-agreed rents. Five clear the costs at today's rates - and here is the ceiling for every town.
Seven hundred and fifty houses across the North East. Three hundred of them three-bedroom. Five that clear the costs at today's mortgage rates.
I measured that properly this week, for the first time, and the result explains why buying an investment property has felt impossible all year. It is not the market. It is the arithmetic, and nobody had done it.
The test
Take the rent a house actually achieves — not the asking rent, the let-agreed figure. Take off management at 12%, insurance, and running costs. Then take off the mortgage interest at six per cent on 75% of the price. What is left is what the house pays you.
My investors need £250 a month left. Below that, one repair wipes out the year.
Two-bedroom houses are effectively dead
Run the numbers and the maximum you can pay for a two-bedroom house and still leave £250 is:
£24,000 in Stockton, Darlington, Thornaby and Seaham. £27,000 in Middlesbrough. £41,000 in Sunderland. £12,000 in Hartlepool.
Two-bedroom houses at those prices do not exist in a lettable condition. So every two-bedroom "high yield" deal you see advertised in the North East is failing this test, usually by a hundred pounds a month or more. I looked at four of them this week and the best left £104.
Three-beds are where the deals are
The three-bedroom rents in the North East are high enough, relative to the prices, to carry a mortgage. These are the ceilings — the most you can pay and still leave £250 a month:
Sunderland £71,000 · Billingham £68,000 · Darlington £59,000 · Thornaby £58,000 · Seaham £53,000 · Stockton £50,000 · Middlesbrough £41,000 · Hartlepool £34,000 · Peterlee £33,000.
Two towns stand out. Sunderland three-beds are agreeing at £850 across seventeen lets, and Billingham at £838 across eight. Those are the two places where the rent can carry a sensible purchase price.
One that works, and two that do not
The one that works. A three-bedroom terrace in Sunderland at £63,500. The rent three-beds achieve there is £850, so after management, insurance, running costs and the mortgage it leaves £277 a month. Twelve houses have sold on the same street, most recently at £85,000 — so the price is below what the street does.
To check it: £63,500 × 75% = £47,625 loan. At six per cent that is £238 a month in interest. Rent £850 less management £102, less running costs £233, less £238 leaves £277.
The one that does not. A three-bedroom in Middlesbrough at £70,000. Three-beds agree at £725 there, which leaves £194 — £56 short. It would need to be about £50,000 to work, and the vendor will not take £50,000.
The trap. A three-bedroom in Seaham at £22,500, which looked like the deal of the year. It is 25% shared ownership of a new build completing in March 2027. You cannot let it, and the rent test does not apply to it at all. I found four of those in one morning's screening. They are the most common trap in this market, and no portal filters them out for you.
Why this feels new, and isn't
Fontaine Brothers, who taught me most of what I know about sourcing, set their target at eighteen per cent returns when money cost 4.5%. At 4.5%, seventeen of those seven hundred and fifty houses pass. At six per cent, five do. The target did not change. The world did.
Which means the question worth asking is not "where are the deals" but "what price works where I am looking". It has an answer. It is above.
What to take from this
Work out the ceiling for your own town before you look at a single house. Rent the town actually achieves, multiplied by 0.88, minus £233, minus the mortgage, and see what is left. If it is not £250, the house has to be cheaper, or you need a different town.
Do not trust a gross yield, including mine. A 16% gross yield on a £45,000 two-bed in Hartlepool is £104 a month. A 12% gross yield on a £63,500 three-bed in Sunderland is £277 a month. The lower headline is the better deal, and that is true more often than anyone selling property admits.
And check the tenure before the yield. Shared ownership, part-buy, auction, a short lease — any one of them makes the price a different number, and a rent compared to it means nothing.
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Numbers like these go out every Thursday. Two or three a week, each checked against what the street actually sold for and what the house actually lets for. If you want them as they happen, put your email in at mikebells.co.uk/contact and say "the Thursday list".
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