Rental market still strong in steel city, expert says
SHEFFIELD’S residential property rental market is standing firm compared to other locations across the UK, according to new research.
Tearle Phelan, head of residential development at property consultancy Knight Frank in Sheffield, said rental prices in the South Yorkshire city were, in contrast to other centres, expected to rise over the coming months.
Mr Phelan said of the situation in Sheffield: “The potential for increase in rental value is an upshot of the general uncertainty surrounding the market, as people err on the side of caution and decide against entering the property market, recognising the value of renting, and as a result, increasing the demand for city centre rented accommodation.“
He said the strength of the city’s rental market could be attributed to the “limited number of high quality centrally located schemes in Sheffield, especially when compared with other regional centres across the UK”.
Mr Phelan added: “The current situation has meant that the majority of residential schemes on the drawing board will remain just that for the time being.
High construction costs and the lack of investors due to the mortgage squeeze have seen developers mothballing schemes and not considering new opportunities.
“However, city living is here to stay and new schemes will continue to come forward but perhaps not on the large scale witnessed to date. New schemes will be smaller and finished with higher quality and better design with attention to detail. “
Mr Phelan said that although sales were slowing, Knight Frank had seen property values remain reasonably static, with newly completed, well located units, such as Atlantic 1 and Butcher Works generating good levels of interest and sales.
Mr Phelan added: “The instability being experienced in the property market should be short-lived and, in the medium and long-term, confidence will return and some of the better mothballed schemes will become viable again, as construction costs also contract to reflect the lack of new build activity and the mortgage market returns to normality.”
