The â€˜Liquorice Allsortsâ€™ Sheffield Property market
Despite the UK economy heading in the right direction with record low mortgage rates and unemploymentÂ figures dropping,Â the rate of property prices rising in Sheffield have tempered since the start of the year. This slow but sure downward trend in the rate of growth has been in evidence since mid-2014. Â Property value increases continue to outpace the growth in salaries, however the gap is closing, helped by a lift in salaries over the last 6 months.Â Property values in the Yorkshire region as a whole are 1.1% higher than a year ago.Â Compare this to the neighbouring regions of the East Midlands at 2.9% higher and the North West at 3.4%, the majority of the country continue to see annual house price gains – the exception being Wales which recorded a slightÂ decline of -0.6%.
Even with the tempering in house price inflation, it does not necessarily change my outlook that property prices are likely to be firmer over the second half of 2015 amid heightening activity in the Sheffield property market.Â As stated in a previous article, there is a current shortage of properties on the market, restricting supply, which in turn will provide stability and support to Sheffield property prices. Therefore, my overall opinion is that Sheffield property prices will rise by 3% over 2015 and roughly the same in 2016.
Property investment is a long term business. Â Buying the right sort of property is vital. I have recently been speaking with a number of Sheffield landlords about the importance of a balanced portfolio, when buying and renting out property. The balance between buying properties that offer good monthly returns (high yields) but quite often offer poor capital growth (i.e. they don’t increase in value that much over the years compared with the average) verses properties that do go up in value quicker but often offer a lower yield. Â So, what type of properties have performed best over the last few years in Sheffield, especially in terms of their capital growth?
When comparing Â what the average price of detached, semi detached, terraced and flats were selling for back at the start of the Millennium to the present. Â The results are quite remarkably different, almost like a bag of Liquorice Allsorts, as the different types of property have performed poles apart over the last 15 years:
Â·Â Â Â Â Â Â Â Â Â Â Â Â Detached Houses in 2000 were selling on average for Â£115,440Â and so far in 2015, they have been selling on average in Sheffield for Â£324,209 a rise of 181%
Â·Â Â Â Â Â Â Â Â Â Â Â Â Semi -Detached Houses in 2000 were selling on average for Â£57,923 and so far in 2015, they have been selling on average in Sheffield for Â£160,220 a rise of 177%
Â·Â Â Â Â Â Â Â Â Â Â Â Â Terraced Houses in 2000 were selling on average for Â£47,564 and so far in 2015, they have been selling on average in Sheffield for Â£128,653 a rise of 170%
Â·Â Â Â Â Â Â Â Â Â Â Â Â Flats and Apartments in 2000 were selling on average for Â£59,540 and so far in 2015, they have been selling on average in Sheffield for Â£110,711 a rise of 86%
Moving forward, what should new and existing buy to let landlords do with this information? Â Well, the questions I seem to be asked on an almost daily basis by landlords are:
Â·Â Â Â Â Â Â Â Â Â Â Â Â â€œShould I sell my property in Sheffield?â€
Â·Â Â Â Â Â Â Â Â Â Â Â Â â€œIs the time right to buy another buy to let property in Sheffield and if not Sheffield, where?â€
Â·Â Â Â Â Â Â Â Â Â Â Â Â â€œAre there any property bargains out there in Sheffield to be had?â€
Many other Sheffield landlords, who are with both us and otherÂ Sheffield letting agents, like to pop in for a coffee,Â pick up the phone or email us toÂ discuss the Sheffield property market, how Sheffield compares with its closest rivals (Barnsley, Rotherham and Chesterfield), and hopefully answer the three questions above.Â I donâ€™t bite, I donâ€™t do hard sell, I will just give you my honest and straight talking opinion and look forward to hearing from you.