Sheffield in South Yorkshire, which was once one of the leading industrial cities in Britain and is still recognised for its large contribution to the highly successful steel industry, has changed a lot, and whether you believe the alterations have been for the better or not, there have certainly been plenty of them, with lots more to come.
Combining the best of city living with the beauty and tranquillity of the nearby Peak District National Park, Sheffield, which is undergoing a strong regeneration programme, is looking more cosmopolitan by the day, and offers lots of opportunities for many of its 570,000 local residents, including the large student population.
Sheffield, home to Sheffield and Sheffield Hallam Universities, was recently named as the best city for graduates, based on the average graduate salary, the average rental cost and house price, monthly utilities as well as disposable income and – perhaps most importantly at an average of just £2.70 – the cost of a pint!
The research by property website The House Shop found that of the main UK cities, Sheffield had the cheapest rental and living costs, with a two-bedroom house costing £667 per month to rent on average, while the average price to purchase a two-bedroom property is just £119,806.
“Sheffield has been the big winner here, with the perfect combination of low rents, affordable house prices, good graduate starting salaries, cheap pints and plenty of shops, pubs, restaurants, clubs and bars to keep new graduates entertained,” said Nick Marr, co-founder of The House Shop.
Separate data provided by Adzuna’s “Affordability Index” for house hunters found that Sheffield ranked in the top 10 most affordable UK cities for first-time buyers at just 3.03 times average earnings for the area; an attractive proposition for bargain hunters, and those priced out of acquiring property across many other parts of the country.
Sheffield’s growing popularity means that demand for property in the city is increasing, as reflected by Direct Line Home Insurance’s latest property research which found that 74% of adults in the Steel City admit to regular window shopping for homes in Sheffield by browsing the main property websites – more than any other part of the country.
This demand is driven not just by students and graduates, but also those relocating from more expensive areas, like Leeds and Manchester, as well as buy-to-let investors, many of which are targeting Sheffield’s vibrant student accommodation market.
Sheffield was recently named as the third best city for buy-to-let property investment opportunities for parents of undergraduate students in the UK, after Leeds and Manchester, with an average rental yield of 5.3% achievable, according to analysis by Urban.co.uk.
The agency’s co-founder, Adam Male, commented: “Universities in the North are incredibly popular, and for parents with children studying in the area, this region presents itself as a prime place to invest.”
“With massive transport investments planned for these areas as well as more businesses moving North, a buy-to-let in these areas is not only likely to offer short-term financial gains, but a solid long-term investment too,” he added.
While demand for property in Sheffield is growing, the supply of housing on the market is actually falling, with the volume of homes on the market down 8.6% in June compared with the previous month, the latest property supply index from online estate agents HouseSimple.com shows.
“Fear and uncertainty over the Brexit vote definitely had an impact on buyer and seller confidence in June, with many sellers holding off putting their properties on the market until the result was known,” said Alex Gosling, CEO of HouseSimple.com.
Although the UK’s decision to leave the EU has come as a shock to some people, Gosling points out that a degree of uncertainty has been removed from the equation, while the growing housing supply shortage may well “counter any fallout from Brexit”.
The latest homeowner research statistics from Plentific.com on the back of June’s Brexit victory highlight that 5% of homeowners in Sheffield are less likely to sell their property in the current market, which will further add to the supply-demand imbalance.
“The big story for the last two years which we’ve been banging on about and every other estate agent has too, is that there is not enough property to sell. Over and over this is the message which has been coming out,” said Ian Preston co-founder of Preston Baker estate agents, which trades in Sheffield, Doncaster, Selby, North Leeds and York.
The growing housing shortage in the city has unsurprisingly placed upward pressure on house prices, with the latest data from property analyst Hometrack revealing that the average price of a home in the city has increased by 4.3% over the past 12 months to reach an average of £128,800.
The report, by Hometrack, shows that Sheffield’s prices are still to return to the levels before the financial crash.
At their highest point in 2007, homes in the city cost £134,737 on average.
Room for growth
Despite the recent market slowdown in places like London and Cambridge, owed in part to the uncertainty around the EU referendum, Richard Donnell (right), insight director at Hometrack, points out that home sales in many large regional cities, like Sheffield, have held up well in comparison.
“This is thanks to a combination of much better housing affordability, improving economic growth and record low mortgage rates helping to stimulate demand,” he said.
While it is still very early days to assess the true impact of the Brexit vote on the housing market in Sheffield, the early affect has been nowhere near as dramatic as many agents has expected.
Given that the volume of households in the city expected to keep growing, the housing shortfall is likely to get worse. But thankfully with market conditions in Sheffield picking up, there are some new developments on the horizon.
The government has big plans for Sheffield that has got many property investment firms, such as the YPC group, excited about the area.
With the government planning to invest £328m by 2021 and approval already given for a high-speed rail link in the form of HS2, the potential for Sheffield is “phenomenal”, according to Brett Alegre-Wood, founder and chairman, YPC.
“We’re talking about regenerating a whole region to make it an economic powerhouse that could eventually rival London. I can see the investment opportunities a mile off,” he said.
Earlier this week, a major Chinese manufacturing firm agreed to invest more than £1bn in Sheffield over the next 60 years, including around £220m by 2019.
The bulk of the funds will be invested in the city centre, and although no individual projects have yet been confirmed, much of the investment is expected to go toward building new homes, as well as hotel and leisure facilities.
The large-scale investment in the city has been described as a “massive vote of confidence in Sheffield” by local Councillor Julie Dore.
“We have the skills and the connections to drive economic growth in our city,” she added.
The money, announced after council leaders visited Chengdu in China last year, is the biggest Chinese investment deal outside London, according to Dore.
Wang Chunming, Sichuan Guodong’s chairman, has personally visited Sheffield on numerous occasions and previously said it has “real growth potential”.
There are lots of new housing schemes in Sheffield – large and small – already under construction and thousands more in the housing pipeline.
Dransfield Properties' Fox Valley town centre development in north Sheffield, which opened earlier this year, will eventually feature up to 118 new homes on the site of the former steelworks.
Sheffield-based property developer Primesite UK Ltd has just submitted a planning application to develop the vacant villas opposite the Botanical Gardens.
The proposal includes replacing existing ancillary buildings behind the offices with four town houses, two with four bedrooms and two with five, plus nine apartments within the office building.
“The city desperately needs new family homes to meet the required provision. This site is sustainable and is a rare opportunity for both conversion and new build in south west Sheffield,” said Scott Hinchliffe, Primesite UK managing director.
Elsewhere, work on a prime housing development in Shiregreen was last month given the seal of approval by Sheffield MP Gill Furniss during a visit to the site.
Leading housing provider Sanctuary Group is more than half way through the construction of its 46- unit over 55s scheme, named Sycamore Heights.
“Sanctuary has invested a staggering £100m in transforming homes and the community at Shiregreen over the past ten years and I’m delighted that they are continuing to support the area through projects such as this,” said Furniss.
Among the recent completed residential projects is a scheme to regenerate Richmond Park, involving the refurbishment and redevelopment of more than 400 run-down homes to create new contemporary family housing that is affordable to rent.
The £24.5m scheme also improved the community’s infrastructure such as the pedestrian links to the roads and problematic alleyways.
Elsewhere, the first phase of Project Maltravers has created a ‘new face’ and gateway for Wybourn through the delivery of 88 much-needed new family homes – 12 of which are bungalows – for affordable rent.
Meanwhile, Little Kelham – a development of 157 one to four bedroom low carbon homes in the Kelham Island area – provides residents with economic living thanks to their exceptional eco features including superior insulation. The homes are also digitally-enabled, allowing residents to control and monitor energy usage from a smartphone or tablet.
While central Sheffield has recovered well over the past year or two, regional disparities in the city’s housing market have widened, with the gap between prices in core areas compared to those in fringe schemes growing.
Values per square foot can now differ by up to 50% when comparing apartments in premium developments in central locations with properties located on the outskirts.
But with residential property prices in the city centre rising, the biggest growth in terms of households moving forward may occur on the outskirts of the city, especially those areas undergoing a major overhaul and where prices appear to represent good value for money.
The primary questions are, which areas will potentially be the biggest beneficiaries of price growth rippling out from central Sheffield and which agents will be there to reap the rewards?
*Marc Da Silva is Estate Agent Today and Letting Agent Today Features Editor. You can follow him on Twitter @propertyjourno