Why hold on to a domain name if it is not being actively used?

The cost of maintaining a name is trivial, I have no compelling need to sell Sheffield.co.uk.

It makes sense to hold on to an unused name if the perceived value is substantially more than the few pounds a year it costs to hold it.

Names as holders of value: There’s a history of transactions being made by exchange of valuable items, perhaps as a way of avioding attention.  In a country suffering high levels of inflation, it can be preferable to hold “savings” in the form of  non-currency assets that will hold their value better, gold being a common choice. “Secret” payments have been made by transferring the ownership of a postage stamp valued at £thousands.  Premium domain names can be used the same ways. This is especially relevant in times of high inflation when most conventional savings will be losing value.

“Domain names don’t matter, everyone uses search and clicks links to find web sites” This line is usually spouted by people wanting to sell you a rubbish domain name.  It’s a tempting line when you have the choice of  paying £thousands for the perfect name or £20 for a garbage one.  Even if your need is for a name for your hobbyist web site or maybe a local club, something meaningful and relevant is best.  In that case there’s no need to  compromise by using an unusual TLD, instead look for a two or even three word .co.uk name.  For example a local group of railway historians might sensibly choose SheffieldRailwayHistorySociety.co.uk (that is exactly the same as sheffieldrailwayhistorysociety.co.uk it is perfectly acceptable to mix capital and lower-case letters, it avoids confusion and avoids the alternative of using hyphens). That meets 4 of my  criteria.  True, it’s an unweildy length of name, but your members will have a bookmark and it’s so long and unique that it may rank high in search results.  If you want to try that I have an additional suggestion, let’s talk.

The Sheffield.co.uk domain is clearly a premium name and commands a valuation which recognises that.
I regularly receive offers to buy the name. I don’t respond to small offers, and have politely declined more substantial offers.
Take a look at the prices of comparable names: Liverpool.co.uk was in the past being advertised for sale at what I consider an optimistic £225,000, I’d expect an offer of half that would at least get a response, I’m sure the vendor would be willing to negotiate.

If the name I want is in active use? In that case you are buying more than just the name.  It may have a good Google ranking, or at least be “known” to Google and considered to “be of good standing”  (i.e. it’s not been used for unacceptable content: spam, malware or porn).  It may have an existing user-base, it may be part of a functioning business.  That complicates things considerably.  The valuation needs to include whatever the current usage implies, positive or negative. Broadly speaking it’s likely to imply a much higher cost but offset by corresponding benefits.

The history of UK domain names