Rentvesting – What it means to be both a tenant and a landlord

As property prices in the UK capital seem to get unaffordable for young professionals, many have started looking outside London to invest, while continuing to rent closer to their offices. Termed ‘Rentvesting’, this new concept is gaining popularity, but those looking to join the ranks of modern rentvestors have many things to consider.

In 2025, the average house price in London is more than twice the UK average, making it the most expensive place in the country to buy a home. To provide a deeper perspective on affordability, London’s average mortgage is over 15 times the average annual wage of a salaried person. This disparity in income and borrowing cost has made homeownership, especially for first-time buyers, all the more challenging.

What is ‘rentvesting’ and how does it solve this affordability problem?

To avoid the burden of expensive real estate and higher mortgages in the capital, many young Londoners and first-time homebuyers are looking to flip the script by making property investments in more affordable parts of the country. By becoming landlords themselves in areas with good rental potential, yet cheaper than London, these savvy investors can now get on the property ladder.

Cities like Sunderland, Burnley, Liverpool, and Newcastle are also catching the interest of new buy-to-let investors due to their attractive yields and relatively affordable housing stock. With rentvesting, investors get a fallback place to live and an extra source of income to help pay off their mortgages. They can also rent anyplace in the capital, depending on where they work.

Here’s what our Director, Marc von Grundherr, had to say about ‘rentvesting’ in this latest article published by the Metro, “Rentvestors are still a relatively small segment of the UK property market, but it’s certainly a growing one. This trend has been driven largely by the lack of affordability in many desirable areas, alongside a greater acceptance of renting as a long-term lifestyle choice among younger generations.”

The pros and cons: What you should consider before rentvesting?

While its benefits make it seem like something to do right away, millennials and Gen Z buyers eager to have a property title to their name should also factor in the potential risks and responsibilities that come along with the rewards of rentvesting.

The benefits of rentvesting in the UK

i. Postcode flexibility: By choosing to continue living on rent, rentvestors enjoy the flexibility of moving homes according to their work and lifestyle needs.

ii. Building equity: Property prices across the UK are growing steadily, so investing allows buyers to set themselves up for capital growth, and rental income and wealth creation.

iii. Diversification: With investors exploring different property markets, the overall housing sector benefits from more demand in lesser-known areas.

iv. Lower purchase costs: The availability of homes at lower prices outside London allows buyers with smaller deposits and budgets to own a property.

v. Tax benefits: Investing in a property can have tax benefits like deductions on mortgage interest. However, considering stamp duty (SDLT) and other purchase costs, we recommend consulting with a financial advisor and checking the latest SDLT and BTL surcharges.

Disadvantages of being a tenant and a landlord at the same time

i. Exposure to risk: Property markets outside London may not always have strong demand, leading to bigger void periods and inconsistent income that can affect repayments.

ii. Rent and responsibilities: You will have to pay your own rent as a tenant while also handling additional management and letting duties of being a responsible landlord, such as ensuring tenant safety and maintaining the property.

iii. Cash flow risks: If the income from renting isn’t enough to cover the mortgage payments, the additional strain of paying rent and the running home loan can get stressful.

iv. Bigger deposits: As a first-time BTL investor, most lenders will require a higher deposit amount and are likely to check viability based on projected rental income over personal earnings.

v. Limited control: Unlike having complete control over an owner-occupied property, rentvesting still means you have to honour the rental agreement in place as both a tenant and a landlord.

Is it legal to rent and let a property at the same time?

While subletting, which involves letting an existing rental property, comes with many rules and restrictions, rentvesting is legally allowed in the UK. However, given the country’s housing shortage and the decline in affordable homes, there is a moral debate about being a landlord while renting from another landlord. Rent inflation and shortage of options for owner-occupiers are cited as potential concerns, but most rentvestors do not feel held back, as there are no legal limitations yet.

Does Benham and Reeves support rentvestors?

As a leading lettings and estate agent, we understand the needs of tenants and landlords and work with both sides. To make things easy, we offer a one-stop buying, selling, letting and property management service to handle everything on your behalf. We have 21 London branches and 14 international offices, and also assist with furnishing and tax returns. Read our detailed landlord guide if you are preparing for your next rentvesting venture.

Contact us anytime, and we will help you get started on your investment and landlord journey.