Could ‘Rent-Vesting’ Let People Make a Start in Property Investment?

Posted by: Lucy Dawe | Post date: 25.04.18

Owning your own home has become an unrealistic dream for many younger people nowadays and the idea of investing in property is just something other people do especially if you live around here in Brighton and Hove or, even worse, in London.  However, a new trend is starting to creep in that may make investing in property a more achievable goal which could lead to far more money and investments in the future but there’s a catch: you don’t get to live in the properties you buy.  ‘Rent-vesting’ is now a thing.  It means investing in property while living in rented accommodation.  Sounds odd, doesn’t it?  But it does actually make a strange sort of sense.

Financial Sense

If you’ve fallen madly in love with Brighton or London and wouldn’t dream of living anywhere else, the odds of you owning your own home are greatly reduced because the prices are totally bonkers.  The average property price in Brighton is around £410,000 and in London, it’s around £500,000.  Flats in Brighton went for, on average, just short of £300,000 last year so buying somewhere to live around here is completely out of reach for lots of people.  However, other parts of the country, particularly up north where it rains a lot, have much cheaper property prices so a very handy way of beginning to invest in property is to buy one of these to let out.  Recent studies show that the average rental property in London yields around 3.5% while properties in Manchester can achieve around 7%.  With a much higher return on investment for properties up north, it makes real financial sense to invest in these rather than struggling to buy a home of your own in Brighton which would probably cost you more in monthly mortgage repayments than you were paying in rent.

Head Over Heart

“But I want to own my own home!” we hear you cry.  We feel that.  The trouble is that it is this emotional attachment that causes us to make bad financial decisions when it comes to buying property.  Throwing everything into buying that dream property is a lovely feeling in the short term but can end up costing you in the long term.  Taking out a 25 year mortgage will leave you, at retirement age potentially, with a lovely paid off property to live in but no disposable income.  Most older people end up selling that lovely home they’ve spent so long paying for just so they can live a decent quality of life.  Whether the dream home is the sort of property that will sell well eventually isn’t a consideration we make at the time but it can come back to bite us later on.  Buying a property for an investment means you are thinking financially and not emotionally which leads to better money-making decisions and fewer decisions based on “But I love it!” (We’ve all been there!)


The stability and security of owning your home is great but not so convenient if you need to move because of changes in circumstance.  It’s also a constant factor in decision making which means you are slightly limited in your choices.  As buying and selling property can be such a convoluted, stressful and expensive business, you don’t really want to do it often, especially if you’re living in the property and are going to be subject to chains and moving dates and all round cuffuffle.  By investing in property you aren’t living in, you keep your options open while still having the security and reassurance of a long term investment.

If you quite like the idea of rent-vesting but aren’t sure where to start or would just like to talk it all through with a nice friendly estate agent, pop into our office in Portland Road or give us a call on 01273 917791 and we would be very happy to chat with you.