Is now the time to invest in property?

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People often ask us if now is the right moment to invest in property. While none of us can see into the future, we can see that in the recent past the Bank of England has upped the base rate thirteen times in a row. 

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In the five years before Covid-19, ultra-low interest rates and cheap mortgages caused a spike in property investments. The stamp duty holiday of 2020 was designed to reboot a sluggish post-pandemic property market, but it resulted in a buying frenzy which fuelled rising house prices. 

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Now, we’re experiencing an unprecedented cost-of-living crisis. With the base rate at 5% and mortgage rates higher still, the favourable economics that contributed to the boom in landlords has gone. As a result, a third of landlords plan to sell at least one property according to the National Residential Landlords Association.

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While many are leaving the market, this can present an opportunity for savvy investors who are willing to take a longer term view and invest in a quality property that serves the changing needs of renters, but you have to be smart about how you do it. So is now the time to invest in property? And how do you take this smarter approach?

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It’s a buyer’s market

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The number of new properties for sale has risen by nearly 4% compared to 2022 and is only trailing 6% behind the pre-pandemic levels of 2019. This means supply is tipping in the favour of buyers, rather than sellers.

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At the same time, higher mortgage rates are squeezing some buyers out of the market. High supply and low demand makes it a buyer’s market. You may be the only one bidding, so make an offer.

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According to Zoopla, 42% of sellers are currently accepting 5% or more off the asking price of their homes. This means if you’ve got the cash to invest, you can get a good deal on an investment property that will result in capital growth over the long term, as well as give you a rental income short term.

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While no one can predict what’s next, the hope and expectation is that the government will get inflation under control. If this happens, interest rates will be cut and buyers will come back into the market, putting an end to the opportunity in front of property investors now.

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You can lower your investment risk by taking a smarter approach

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Smarter Rent is for investors who don’t want the hassle of sourcing or managing a rental property. We find the property, interior design it and then manage it for you.

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We hand-pick properties in the best locations to minimise risk. We earn 30-50% more in rental income for owners compared to traditional agents, and our occupancy rate is 95%+.

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Our investors pay more upfront to bring properties up to high standards and fit them out with everything they need so that their occupiers get the homes they deserve.

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Contracts are fair and transparent. A comprehensive concierge service means we look after our residents at all times, meaning our investors rarely hear from us.

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Smarter Rent properties aren't just rentals, they’re exceptional homes that our renters love. You can read more about how relieve investors of the burden here.

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Invest in a short term refurb for long term reward

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Before and after pictures of a refurbishment project we recently completed for one of our investors.

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We recently sourced a two-bedroom house in Woking, Surrey for one of our investors. It needed renovation and we secured it for £302,000, almost £25,000 below the asking price. 

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This is the third house we’ve taken on for this investor and he was happy to be led by the expertise of our in-house designer Lisa Durrant.

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“It’s a 1960s house and was in need of a total overhaul. While the amount of work may scare some people, we see this as an opportunity to turn something run down into a beautiful product designed for renters. 
We wanted to maximise the feeling of light and space, so we put in a new kitchen with double doors out to the garden. We laid hard wearing flooring which can cope with pets and went for neutral colours and cosy furnishings to make the property feel homely ” says Lisa.
“The neighbours didn’t recognise it when we invited them in to have a look around.”

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The house has now been rented out for £3,200 a month and will earn its owner 40% more than similar properties in the area, plus capital lift.

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Still questioning whether now is the time to invest in property?  

Read our article on the pros and cons of investing in property, and your best options in 2023.