Property Investment in Sheffield – A Guide by Aspen Woolf
In this article we take a closer look at the benefits of Sheffield property investment.
In recent years, Sheffield has emerged as one of the North’s prime locations for real estate investment. From a thriving university scene and growing student tenant market to a hub for young professionals and industry, Sheffield is home to a flourishing rental market attracting investors.
Transforming itself from an old industrial centre, today Sheffield is looking to the future, becoming a place where more people want to live, work and study. With a number of regeneration and investment projects in store and a growing population, more investors are choosing Sheffield as a destination to invest their money.
A Thriving University City
Sheffield is one of the UK’s most popular student cities. Its two main universities, the University of Sheffield and Sheffield Hallam University account for the majority of the student population – around 10% of the city’s total inhabitants.
In the 2020-20221 academic year, 65,000 undergraduate and post-graduate students enrolled in Sheffield’s two higher education institutions. Demand for student accommodation in Sheffield is high. The majority of students live in university-owned or privately rented accommodation.
Sheffield has a relatively stable and consistent student market. Demand for student accommodation is driven by the ongoing growth of the city’s universities. Investing in shared flats, houses and studio apartments in the city centre area can be particularly appealing to investors.
A Growing Number of Young Professionals
As an up-and-coming, vibrant city in the North of England, Sheffield is attracting scores of young professionals, many of which are students that choose to stay on in the city after graduation.
Totally Money recently scored Sheffield above London and Manchester in the list of “Best Places in the UK to Make a Living”. The survey considers factors like salary, job growth, living costs and unemployment across all cities in the UK.
Sheffield is gaining a reputation as a city with a thriving creative and digital scene. Over 1,000 people are employed in digital industries across the city region. The top 25 tech companies in Sheffield City Region employ more than 12,000 people and bring in more than £2 billion a year.
Sheffield’s Growing Economy
Sheffield’s economy makes it one of the most prosperous cities in England. In 2020, GDP for Sheffield was £15 billion. In 2023, Sheffield’s economy is set to return to growth at a faster rate than all other Yorkshire cities. Sheffield’s economy is predicted to be 0.5% larger in Q4 2023 than the end of last year. It has the second-highest employment growth at 1.2% behind Leeds.
Sheffield is one of the UK’s leading cities in terms of manufacturing and engineering industries. Companies like Boeing, Rolls-Royce and Tata Motors each have a hub in Sheffield.
The city is also growing its digital media and financial services sectors, attracting startups and cutting-edge environmental and energy companies.
The Sheffield City Region recently launched a strategy to boost its economy. The number of jobs has increased in Sheffield over the last year by more than 4.2%. Sheffield has one of the lowest unemployment rates in the UK. by 2025, Sheffield is expected to have 70,000 more jobs, 6,000 more businesses and 30,000 highly skilled occupations in the city.
Regeneration and Investment
City-wide renovation has transformed Sheffield in recent decades. Today, Sheffield boasts a modern skyline mixed with historic buildings and ongoing investment projects continue to give the city a boost.
- Heart of the City II
The 17-acre site of the Heart of the City II renovation project is a mix of new office buildings, residential accommodation and retail space.
Located between the Devonshire Quarter and The Moor Gateway, the £470 million scheme features mostly new buildings as well as some historic refurbishments. The Masterplan for Heart of the City II is attracting a number of global names, including HSBC and Radisson Blu.
- Levelling Up Fund
Sheffield recently welcomed £37 million to fund two major regeneration projects at Castlegate and Attercliffe, receiving the full amount requested from the UK Government’s Levelling Up Fund.
- £20 million of the funding will be used to redevelop the historic Castlegate, a focal point of the city centre. The project will deliver new greenery and public spaces.
- The fund will also help to create two new art and cultural destinations in the city centre. Park Hill Art Space will be a new home for artists in the city with space for collaboration and display in one of the North’s biggest contemporary art galleries.
- A six-acre sculpture park will connect the Art Space to Castlegate.
- West Bar
The West Bar £300 million regeneration scheme will see the area transformed into a new space comprising a mixed-use environment. A combination of retail, leisure, hotel and living space, West Bar will feature office space, 388 residential units and space for 6,000 workers.
Are House Prices Rising in Sheffield?
Sheffield houses were, on average, sold for £240,000 in the last 12 months (January 2022 – December 2022). This is a 26% (£50,666) change compared to the previous 12 months, a 26% increase on the year prior.
House prices in Sheffield are well below the UK average of £283k, making Sheffield one of the more affordable places to buy a property in the UK and Sheffield property investment increasingly attractive.
According to Savills, the average UK house price is predicted to fall 10% by the end of 2023. Many potential buyers are grappling with high mortgage rates, high home prices, inflation and a potential recession.
Sheffield has Strong Rental Yields
According to the latest data from Home.co.uk, average rental yields in Sheffield are 5.1%, however, these vary depending on the area and type of property.
Properties in more sought-after areas of Sheffield, such as Ecclesall and Ranmore have lower yields due to higher property prices. More affordable areas like Attercliffe and Darnall can deliver higher yields but come with risks such as higher vacancy rates.
With a strong student population, average gross yields for student properties can be 6.5%, according to PropertyData. Depending on the specific location and type of property, yields for student properties can be between 5 – 9%, meaning Sheffield student property investment can be lucrative indeed.
Is Sheffield a Growing Area?
Between now and 2034, Sheffield’s population is projected to rise by 62,000 and could be even higher if economic growth continues. A growing population means buy-to-let Sheffield will be an even more appealing prospect due to increasing demand for rental properties.
Sheffield continues to attract residents and investment due to its advantageous geographic location, in addition to its close proximity to nature and strong job opportunities. These factors, as well as a popular student tenant market, make Sheffield property investment increasingly attractive.
Is Sheffield a Good Area to Invest in Property?
Property investment in Sheffield is attractive because property prices are lower tha
n the UK national average, making the city more affordable for investors. The large student population is also a strong draw for investors, who can benefit from a steady stream of tenants ensuring their property isn’t vacant.
Significant regeneration in recent years is making Sheffield an increasingly attractive place to live. Major developments such as Sheffield Retail Quarter and Sheffield Digital Campus are helping to boost property prices and spur job creation. With affordable property and a strong market, Sheffield can be a profitable place for many property investors.
When it comes to Sheffield investment property, the most in-demand properties are semi-detached houses followed by terraced houses. Sheffield investments in studio flats near the city centre and close to university campuses were also in high demand, particularly from international students.
The majority of sales in Sheffield during the last year were semi-detached properties, selling for an average price of £217,644. Overall, sold prices in Sheffield over the last year were 3% up on the previous year and 14% up on the 2020 peak of £201,788.
Sheffield property investment is on the radar of more investors. With property prices lower than the UK average, a strong student tenant market delivering healthy yields, growing job opportunities attracting young professionals and regeneration making the city increasingly attractive to live, Sheffield should be on the radar as your next property investment destination. To find out more about investing in property in Sheffield, get in touch with our experts.