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What will happen in Sheffield’s real estate market? Will prices go up or down? Is Sheffield still a hotspot for property investors? How is the UK government impacting real estate policies and taxes in 2025?
We’re constantly asked these questions because we’re deeply involved in this market. Through our work with local estate agents, property developers, and clients who buy properties in Sheffield, we’ve gained firsthand insights.
That’s why we created this article: to provide clear answers, insightful analysis, and a well-rounded perspective on market predictions and forecasts.
Our goal is simple: to ensure you feel informed and confident about the market without needing to look elsewhere. If you think we missed the mark or could do better, we’d love to hear your thoughts. Feel free to message us with your feedback or comments, and we’ll work hard to improve this content for you.
1) Rental demand in regenerated areas will grow, boosting investor yields
In recent years, Sheffield has seen a significant transformation due to urban regeneration efforts. With over £1.5 billion invested in areas like Castlegate and the Heart of the City, property values have risen, making these areas attractive for investors. This trend mirrors what we've seen in other cities where regeneration has led to increased property values and rental yields.
The rental market in Sheffield has also experienced notable growth. By October 2024, the average monthly rent reached £863, up from £792 in October 2023. This increase is largely driven by the demand from students and young professionals who prefer city-centre living. Additionally, the Build-to-Rent (BTR) sector has seen a 11.3% rise in rents, reflecting a strong preference for these properties due to a housing supply shortfall and the city's appeal as a hub for skilled jobs.
Sheffield's regeneration efforts, part of the UK's "Levelling Up" policy, aim to create eco-friendly communities with a mix of commercial, retail, and residential spaces. These initiatives have boosted demand for housing, driving up property values and rental yields. The influx of young professionals and students, attracted by the city's job market and amenities, further fuels this demand.
Sources: Flambard Williams, Centrick, CIA Landlords
2) Rental yields in the city center will grow as more people want to live in urban areas
Rental yields in the city center are expected to increase as demand for urban living continues to rise. One of the main reasons is the rising rental demand, as seen in Sheffield where the average monthly private rent increased by 8.9% from 2023 to 2024. This increase in rent is a clear indicator of growing demand, which naturally pushes rental yields higher.
Another factor contributing to this trend is the increasing population growth in urban areas. For instance, Sheffield's metro area population grew by 0.67% in 2024 and is projected to grow further by 0.8% by the end of 2025. More people moving into the city means more demand for housing, which in turn boosts rental yields.
Additionally, the limited availability of rental properties in the city center plays a significant role. As suburban property prices rise, more people are pushed towards renting in the city center, where properties are scarce. This scarcity drives up rental prices and yields.
Sources: Flambard Williams, Macrotrends, Crucible Homes
We made this infographic to show you how property prices in the UK compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
3) Demand for accessible housing and retirement communities will grow as the population ages
As we look back at the data from 2023 and 2024, it's clear that the aging population in Sheffield is on the rise. By 2025, the number of people aged 65 and over is expected to reach around 100,300, and this trend is projected to continue, reaching 121,000 by 2040. This significant increase in older residents means more people will need housing that suits their needs as they age.
People are living longer than ever before, with life expectancy at age 65 in the UK being 18.3 years for males and 20.8 years for females as of the early 2020s. This means that not only are there more older adults, but they are also living longer, which increases the demand for housing that can accommodate their needs over time.
Moreover, the demand for healthcare and support services is rising, especially for those aged 90 and above. This age group is expected to grow significantly, indicating a need for specialized care and support services. As a result, there is a growing interest in retirement communities that offer a supportive living environment, catering to the diverse needs of older adults.
Sources: Sheffield City Council, Office for National Statistics, NIC MAP Vision
4) Property values in the S2 postcode will rise significantly as regeneration projects improve the area
The S2 postcode in Sheffield is set to see a significant rise in property values, thanks to ongoing regeneration projects that are transforming the area. In the past, 2023 and 2024, we saw major investments in local infrastructure, such as the Sheffield City Centre Regeneration. This project included uncovering the River Sheaf and creating new public spaces, which have made the city centre more attractive and better connected.
Additionally, the introduction of the Sheffield Connect service, a free zero-emission bus service, has improved transport links, making it easier for people to move around the city. This has enhanced the area's appeal to both residents and businesses. The completion of new residential and commercial developments, like the Attercliffe Waterside housing project, has also played a crucial role. This development brought 362 new zero-carbon homes and revitalized brownfield land, adding to the area's charm and functionality.
Moreover, Sheffield's economy has been on the rise, being the second-fastest-growing city economy in the UK in 2023. This economic growth, driven by sectors like tech and manufacturing, has increased the demand for housing. The job market expansion, with plans to create over 7,000 new jobs by 2030, further supports this demand. As more people move to the city for work, the need for housing in areas like S2 continues to grow.
Sources: Welcome to Sheffield, Flambard Williams, SheffNews
5) Rental yields in student areas will rise as university demand stays strong
Rental yields in student-heavy areas like Sheffield are expected to keep increasing due to the consistent demand from the university population. One of the main reasons is the increasing student enrollment numbers. For instance, the University of Sheffield experienced a 13% growth in student numbers between 2014/15 and 2019/20, which shows a steady demand for student housing.
Additionally, historical data shows rising rental yields in these areas. The average rental yields for Sheffield are around 4.65%, but student properties can offer higher yields of up to 6.5% due to strong demand. This is further supported by the consistent low vacancy rates in student accommodations, where the majority of beds are en-suite and priced competitively, indicating high occupancy rates.
Moreover, surveys indicate a high demand for student housing, with the sector rebounding since the pandemic. Reports of new student housing developments being fully booked also highlight the strong demand. The growing number of international students, who make up 32% of the University of Sheffield's population, adds to this consistent demand.
Sources: Flambard Williams, Wikipedia, Sheffield City Council, CrowdStreet, Aspen Woolf
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6) Virtual reality tours will attract more international buyers as they become a standard for property viewings
Virtual reality tours have become a common tool for property viewings, especially for international buyers, due to several key reasons. First, the global market value of VR in real estate was projected to reach $2.6 billion by 2025, showing a significant increase in adoption. This growth was mirrored in the UK, where the AR and VR market in real estate was set to hit $80 billion by 2025.
In Sheffield, the city's economic growth and strong city centre lifestyle made it an attractive destination for international investors. The city's ongoing regeneration projects further enhanced its appeal to young people and professionals from around the world. This international interest was supported by surveys indicating that 67% of home buyers wanted a virtual tour when looking at a listing, with 50% preferring virtual tours over photography alone.
Properties offering virtual tours received 87% more views than those without, indicating higher engagement and interest from potential buyers. Listings with virtual tours sold for an average of 9% more and closed 31% faster, demonstrating their effectiveness in the market. Additionally, VR allowed real estate agents to market properties globally, making it particularly useful for luxury real estate and international buyers.
Sources: EZ Real Estate Tools, Flambard Williams, The Luxury Playbook, PhotoUp
7) Overseas investor demand will grow in areas with major regeneration projects
In recent years, areas undergoing significant regeneration have become increasingly attractive to overseas investors. This trend is particularly evident in cities like Sheffield, where large-scale projects are transforming the urban landscape. For instance, the Heart of the City II and West Bar Square projects are revitalizing Sheffield’s city center, leading to rising property prices and increased economic growth. These developments create a vibrant environment that appeals to both investors and residents.
Moreover, global real estate trends show a growing interest from international investors in stable and high-yielding property markets. Sheffield, with its affordable prices and strong rental yields, fits this profile perfectly. The city’s participation in the Northern Powerhouse project further enhances its appeal by providing economic opportunities that attract foreign investment.
Additionally, infrastructure improvements like the planned HS2 high-speed rail link, which will significantly reduce travel times between Sheffield and London, make the city more accessible to international investors. This improved connectivity is expected to boost property values and draw more foreign investment. Media coverage highlighting Sheffield as an emerging investment hotspot also plays a crucial role in attracting overseas interest.
Sources: Flambard Williams, World of Auctions, Alesco Property
8) Rental stock will decrease due to stricter regulations on rental properties
Stricter regulations on rental properties often lead to higher compliance costs for landlords. In Sheffield, for example, landlords must register each short-term rental property and pay applicable Council Tax, which can be a significant financial burden. This increased cost can deter landlords from operating rental properties, leading to a decrease in the number of rentals available.
Historical data from Sheffield and other cities shows that stricter regulations have led to a decline in rental stock. After new regulations were introduced in other UK cities, there was a noticeable decrease in the number of rental properties available. This trend suggests that similar regulations in Sheffield could also lead to a reduction in rental stock.
Surveys among landlords in Sheffield indicate that stricter regulations often lead to an intention to sell properties rather than continue renting them. The increased administrative burdens and compliance costs make it less profitable for landlords to operate rental properties, prompting them to exit the market.
Case studies from other cities, like London, where regulations are particularly stringent, show a significant decrease in rental properties due to increased compliance costs and administrative burdens. This pattern is consistent with reports from Sheffield, where some landlords are exiting the rental market, contributing to a decrease in available rental stock.
Sources: BNB Calc, Sheffield City Council, Sheffield Democracy
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of the UK. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
9) Rents in student areas will rise as university demand stays strong
Rents in student areas are likely to keep increasing due to the consistent demand from the university population. One of the main reasons is the increasing student enrollment numbers. For example, in 2023, the University of Sheffield received 43,665 applications, with a high acceptance rate of 75.3%. This means more students are coming to the area, which naturally boosts the demand for housing.
Another factor is the historical data showing rising rental prices. In 2024, rental prices in Sheffield, especially in areas like S35, rose by 5% to 7% due to increased demand and limited housing supply. This trend indicates that as more students arrive, the competition for available housing intensifies, pushing rents higher.
Additionally, the low vacancy rates in student housing contribute to this trend. The student to bed ratio in Sheffield is significantly below the national average, showing that there are not enough beds for the number of students. This low vacancy rate means that students have fewer options, which again drives up rental prices.
Sources: Crucible Homes, Wikipedia, Sheffield City Council PBSA Study
10) Interest in suburban homes will grow as international buyers look for larger family properties
In recent years, we've seen a growing interest among international buyers in suburban properties, especially as they look for larger homes suitable for family living. One of the main reasons for this trend is the shift to remote work, which has increased the demand for more spacious homes. Suburban areas, where larger properties are more common, have become particularly appealing for those prioritizing work-life balance and family space.
Additionally, the UK has experienced a rise in international property investments, driven by economic stability and favorable tax policies. This broader interest in UK real estate includes suburban properties, which are often seen as offering a better quality of life. Surveys and market reports frequently highlight that international buyers prefer suburban living due to its perceived quality of life, safety, and family-friendly amenities.
Moreover, the affordability and availability of larger suburban homes compared to city centers make these areas attractive to international buyers. For instance, in Sheffield, the average price for a four- to five-bedroom house is relatively affordable, enhancing its appeal. Suburban areas also offer better access to family-friendly amenities like parks, schools, and community centers, which are important factors for international buyers with families.
Sources: MPA Mag, CBS News, Sheffield Home Buyer Group
11) Interest in Sheffield's student housing will grow as the city becomes a more popular university hub
Sheffield is becoming a hot spot for foreign investors in student accommodation due to its growing reputation as a university hub.
The University of Sheffield has seen a surge in student numbers, which naturally boosts the demand for housing. This is especially true for international students, many from China, who are drawn to the university's global appeal. The university's high global rankings make it a magnet for students worldwide, further increasing the need for quality accommodation.
In recent years, Sheffield's student housing market has expanded rapidly, with new developments popping up to meet the high demand. This growth is a clear signal to foreign investors that there's a lucrative opportunity here. The UK government's policies encouraging foreign investment add to the appeal, making Sheffield's student accommodation sector even more attractive.
Sheffield's universities are not just expanding in student numbers but also in facilities and programs, which is a big draw for students. This expansion means more students are looking for places to live, and investors are eager to provide them. The city's reputation as a university hub is only getting stronger, making it a prime location for investment.
Foreign investors are particularly interested in the high-quality student housing that Sheffield offers. The city's commitment to providing top-notch facilities is a major selling point, and investors are keen to capitalize on this demand. With the international student population growing, the need for quality accommodation is more pressing than ever.
Sheffield's student accommodation market is thriving, and foreign interest is set to rise. The combination of a growing student population, high global rankings, and supportive government policies makes Sheffield an attractive destination for investors looking to tap into the student housing market.
Sources: Wikipedia, York City College, Sheffield City Council, Claypenny
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12) Property interest in Walkley will grow as it becomes popular with first-time buyers and young professionals
In recent years, Walkley has become increasingly attractive to first-time buyers and young professionals. One of the main reasons is the rising property prices in central Sheffield, which have made these areas less affordable. As a result, many buyers are looking towards more affordable neighborhoods like Walkley.
The demand for affordable housing is evident, with a significant portion of properties sold in Sheffield falling within the £100k-£200k range. Walkley offers properties in this price bracket, making it an appealing option for those entering the property market for the first time.
Additionally, improved public transport links, as part of Sheffield’s Transport Vision, have made Walkley more accessible. Enhanced connectivity is a key factor for young professionals who rely on efficient transportation for their daily commutes.
Moreover, the development of new amenities and services, such as outdoor spaces and electric vehicle charging points, has improved the quality of life in Walkley. These enhancements make the neighborhood more desirable for those seeking a vibrant and convenient living environment.
Sources: Plumplot, SheffNews, Rightmove
13) Suburban rental yields will stay steady as families look for bigger homes outside city centers
In recent years, we've seen a significant shift in how people work, with more individuals working remotely. This change has led many families to look for larger homes where they can have dedicated spaces for work and relaxation. As a result, the demand for suburban properties has been on the rise, and this trend is expected to continue.
In Sheffield, property prices in suburban areas have remained stable or even increased. For example, in areas like the S2 and S3 postcode districts, the average asking prices are around £143,130 and £131,208, with rental yields ranging from 6% to 6.5%. This stability in property prices supports the idea that suburban rental yields will remain steady.
Moreover, the rental market in Sheffield's suburbs is strong, with a consistent demand from families seeking larger homes. High occupancy rates in single-family build-to-rent communities, which have reached 95.5%, reflect this ongoing demand. Families are drawn to the suburbs for more space and amenities, such as gardens and parks, which are more readily available outside the city center.
Sources: TenantCloud, Fabrik Property Group, Flambard Williams
14) Suburban property prices will rise steadily as families seek more space and quieter neighborhoods
Suburban living is becoming increasingly popular as more people work from home.
With the rise of remote work, families are seeking larger, more affordable homes away from bustling city centers. This shift is particularly noticeable among millennials, who are the largest group of homebuyers today. They want homes that can accommodate both their work and family needs, making suburban areas more appealing.
Take Sheffield, for instance, where the property market has seen a 1.6% increase in house prices from September 2023 to September 2024. This uptick highlights the growing demand for suburban properties. Families are drawn to homes that offer more space, home offices, and outdoor amenities, which are typically found in quieter neighborhoods.
As more people move to these areas, there's a push for better infrastructure. This includes new schools and health facilities to support the growing population. Investments in public transportation and broadband connectivity are also on the rise, catering to those who work from home and enhancing the overall quality of life.
These improvements make suburban areas even more attractive, as they offer a balance of space, convenience, and community. The trend is clear: suburban areas are set to see a steady rise in property prices as families continue to prioritize space and tranquility.
With these developments, suburban living is not just about escaping the city; it's about finding a place that meets modern lifestyle needs. As infrastructure catches up with demand, the appeal of suburban neighborhoods will only grow, making them a smart choice for potential homebuyers.
Sources: Unreal Estate, Flambard Williams, OECD
We did some research and made this infographic to help you quickly compare rental yields of the major cities in the UK versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
15) Property prices in Sheffield will keep rising due to urban development and regeneration projects
Sheffield's property prices have been on a steady rise, and this trend is expected to continue. In 2024, the average property price was £211,000, marking a 1.6% increase from the previous year. Experts predict a further 3-4% growth in 2025, driven by the city's stable property market and its appeal compared to the national average.
One of the key factors contributing to this growth is the significant investment in urban development projects. Over the next five years, more than 1,000 council homes will be built or acquired to meet the demand for affordable housing. This includes a substantial £255 million investment for acquisitions and new builds in 2024/25, which adds to the £28 million allocated in 2023/24.
Additionally, major regeneration projects like the Heart of the City II and the expansion of Kelham Island are transforming Sheffield's landscape. These initiatives not only enhance the city's appeal but also drive up property values in key areas. The completion of such projects is expected to further boost the attractiveness of Sheffield as a place to live and invest.
Sources: Plumplot, Sheff News, Sheffield Homebuyer Group
16) Demand for eco-friendly homes will grow as people become more environmentally conscious
Interest in eco-friendly homes is expected to rise as environmental awareness continues to grow. In the past, projects like Equans' £5.5m eco-homes initiative in Sheffield have set a precedent by integrating sustainable features such as electric vehicle charging points and solar panels. These efforts align with the city's goal to become a zero-carbon city by 2030, highlighting a strong commitment to sustainability.
The Sheffield Growth Plan from 2025 to 2035 emphasizes the importance of innovation and investment in sustainability, which is likely to increase demand for eco-friendly homes. This plan not only focuses on expanding knowledge-intensive industries but also on promoting sustainable living through urban planning policies. Such strategies are crucial in driving the development and adoption of eco-friendly housing.
Moreover, the rising sales of sustainable building materials, like those offered by Aggregate Industries, indicate a growing demand for eco-friendly construction options. This trend is supported by consumer surveys from 2024, which show a clear preference for energy-efficient homes equipped with modern insulation and smart technologies. As energy costs continue to rise, the cost-saving potential of these homes becomes even more attractive to homeowners.
Sources: Equans, Sheffield Growth Plan, Aggregate Industries, Green Housing Trends
17) Young families will flock to Hillsborough for its green spaces and quality schools
Hillsborough has become increasingly popular with young families, and there are several reasons for this trend. One of the main attractions is its proximity to green spaces, which surveys have shown are highly preferred by young families. Hillsborough Park, for example, offers 49 acres of parkland with a fishing lake, playground, and other recreational facilities, making it an ideal spot for family outings and activities.
Another significant factor is the quality of schools in the area. Hillsborough is home to well-regarded educational institutions, which is a major draw for families looking to provide their children with a good education. Increased enrollment numbers in local schools further indicate the area's appeal to young families, as they seek out places that offer both educational and recreational opportunities.
Additionally, the local government's investment in infrastructure and amenities, such as the Hillsborough Hub project, demonstrates a commitment to enhancing the area's family-friendly appeal. This includes community spaces and improved recreational facilities, which contribute to the overall quality of life in Hillsborough. These factors, combined with rising property prices and increased demand for family-sized homes, suggest that Hillsborough is becoming a preferred location for young families.
Sources: Hillsborough Park - Wikipedia, The Sheffield Plan: Citywide Options for Growth to 2034, Hillsborough Park facility improvement - Courtside Hubs CIC
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility. Finally, please note that we are not affiliated to any of the sources provided. Our analysis remains then 100% impartial.