Introduction
Despite only being the fourth largest city in England, with a population exceeding 600,000, Sheffield is emerging as one of the hottest property markets in the country. Affordability, a prosperous business scene and a location surrounded by some of the best natural beauty in the UK is generating considerable housing demands in the city. This demand is generating buy-to-let property investment opportunities in Sheffield that offer incredibly high prospective rental yields, while the city’s ahead-of-the-curve market growth should see returns through capital growth. Overall, Sheffield is one of the most exciting investment hotspots in the country.
About Sheffield
Sheffield is located in South Yorkshire, towards the North of the country, and is a unique city in many ways. The only city to be contained in a National Park, greenery and outdoor spaces are fundamental to Sheffield. Bathed in the beauty of the Pennines and the Peak District there is no shortage of stunning views and breath-taking landscapes in the city.
The city flourished in the Industrial Revolution due to a ground-breaking steel production method, and the nickname “steel city” remains to this day. While its manufacturing and engineering roots have continued, the city has diversified into a range of sectors, including the service industry that now dominates the £11 billion pound economy of this emerging powerhouse. Its industry has strong links to its two research-intensive universities, including the Russell Group Affiliated University of Sheffield, which is generating an innovative commercial landscape in the city. It also boasts one of the highest proportion of degree educated workforce in the country.
Sheffield also contains excellent culture. The city has several museums as well as England’s largest comedy festival. In recent years, Sheffield has gained a reputation for its music scene, with many bands originating from the area, an abundance of music venues and a thriving music community. Sport is also key to the city, the site of the world’s first ever football club, and currently two current professional teams, Sheffield United and Sheffield Wednesday. Its crucible theatre also houses the World Snooker Championship and the city has close ties to the sport.
Is Sheffield a Good Place to Buy a House?
Property for sale in Sheffield is currently undergoing a surge in demand. The increase in popularity in the city is generating a huge demand for rental properties, causing house prices to increase at some of the nation’s highest rates. This is driven by a range of factors, including the excellent work-life balance, thriving economic prospects and affordability, and makes Sheffield property one of the best investment opportunities in the country.
Property for sale in Sheffield is amongst the most desirable in the UK. Helped by the fact a third of the city is contained within the Peak District National Park, as well as containing numerous parks and gardens, a huge 61% of the city is green space. The topography is unlike any other city, with rolling hills, valleys and reservoirs all just minutes away from the centre, and five intersecting rivers. Whilst always been appealing to residents, the shift in attitudes that emerged from the COVID pandemic has generated an influx of new people moving to Sheffield to improve their lifestyle. The city is not just desirable due to its location and scenery, as Sheffield has an abundance of culture. It has an established arts scene, numerous museums, famous music output and a lively sporting culture. People moving to Sheffield to make the most of its way of life are increasing its rental needs, which suits buy-to-let investment.
Another factor making Sheffield a good place to buy a house, especially for investment returns, is its thriving economy. It has a diverse portfolio, covering engineering, with companies such as Boeing, Rolls-Royce, McLaren and TWI based in the city, as well as a strong service industry. Its universities generate significant economic prosperity in the public sector, as well as drawing innovative companies and spin outs to the area, while the city is emerging as a digital and technology hub. Its two universities also require additional rental housing for a stable 60,000 student population, with strong graduate retention rates. Sheffield remains well connected by road, via the M1, as well as by train. Currently London is less than two hours, while Manchester and Leeds are 50 and 40 minutes respectively. These times will be slashed upon completion of HS2 trains.
Perhaps the biggest reason that makes property for sale in Sheffield so attractive is its affordability. House prices in the city are well below the UK average, allowing property to be bought for much lower outlays. This generates significant rental yields, thanks to the huge levels of increasing demand for property in Sheffield. The city is also undergoing significant regeneration. A number of projects are underway, developing housing as well as the city centre’s retail, entertainment and business spaces. Flagship projects include The Heart of the City and The Moor and Castlegate, which are changing that face of the area. Sheffield’s greenery remains at the heart of the development, prioritising planted and traffic-free spaces.
The perfect blend of economic prosperity, attractive scenery and importantly low-property prices, makes Sheffield an unmatched property investment opportunity.
Sheffield House Prices
Why Are House Prices so High in Sheffield?
Sheffield house prices, while well below the national average, are high for its region. The city is part of the wider Yorkshire and The Humber area, in which the average house price is £214,773. This makes the average house price in Sheffield appear high, at £225,378. The reason for the higher property price compared to the surrounding areas, is due to the desirability of the town. The strong business prospects, entertainment and leisure facilities and good transport connections generates a higher property price in Sheffield.
However, when compared to the rest of the country, property for sale in Sheffield is much cheaper. The national average is currently £315,119, a massive 46% higher than Sheffield, demonstrating the excellent value of property in the city.
Are House Prices Rising in Sheffield?
According to the HM Land Registry Property Price Index, property for sale in Sheffield has been steadily rising for a few years, mirroring the increase in demand for housing in the city. The rise in house pricing has been driven by the movement of residents to the area, looking to exploit the economic prosperity in a town surrounded by natural beauty and stunning geography. Over 2022, house prices demonstrated 15.5% growth, making it one of the fastest growing areas in the country, and adding an additional £30,000 onto the average house price. This growth has been steady, with a 47% increase over the last five years.
Is Now a Good Time to Buy in Sheffield?
The development of Sheffield has turned it into an investment hotspot for buy-to-let properties. The status of the property market is perfect for investors looking to begin or expand their portfolios. With the current affordability of property in the city, investors should exploit this as soon as possible. The low initial prices, combined with significant rental demand resulting from the increased desirability, is a perfect combination to provide rental yield returns. On top of this, the house price growth that Sheffield properties have shown would generate capital growth on top of rental returns. With the shift in attitude of workers to favour Sheffield’s unrivalled greenery and the ongoing redevelopment of the city, this presents a great buy-to-let investment opportunity.
