Affordable housing and urban regeneration drive interest in this northern city
Sheffield is being highlighted as a top location for buy-to-let investments in 2025, with its affordable property prices, strong rental demand, and opportunities for high yields making it an attractive option for landlords. According to Joseph Lane, founder and director of Mortgage Lane, the city offers a unique blend of affordability and growth potential that investors should seriously consider.
Lane pointed to areas near the city centre and university campuses as key locations to target, citing the city's diverse tenant base, which includes a significant student population and young professionals working in industries such as healthcare, education, and digital technology.
For standard rentals, Lane noted that two-bedroom apartments are in high demand among young professionals and small families, with average prices around £180,000. Meanwhile, larger four- to five-bedroom houses are ideal for houses in multiple occupation (HMOs), catering to students and professionals, with properties typically costing around £240,000.
The rental yields reflect this demand, with gross returns for standard properties ranging between 5.5% and 6.5%, while HMOs often achieve yields of 8% to 10%, given their multi-tenant appeal.
“Sheffield offers excellent investment opportunities due to its affordable entry prices and strong rental demand. The city is particularly attractive for HMO investments, where higher yields can be achieved due to the constant influx of students and young professionals. The potential for capital growth is also significant, driven by urban regeneration projects and an expanding economy, making Sheffield a promising location for both traditional buy-to-let and HMO strategies,” Lane said.
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