Investing in property when interest rates are high – what should property investors be doing right now?

The UK’s inflation rate has slowed more than expected to the weakest pace in 13 months, falling to 7.9 per cent. In response to this, the market now sees further interest rate rises as less likely.

Since the mini budget, we have seen interest rates rise by 4% to a base rate of 5%, a move, coupled with the cost of living, that is hitting many homeowners and has rarely left the UK’s news outlets in recent months.

We take a step back from the headlines, and look deeper into a property market which is seeing record rent rises, to outline what property investors can do to maximise the potential in the market right now.

The first place to start is to consider is who is impacted by the changes in the market. The rise in interest rates is not an issue which negatively affects the whole property market – it is something which mostly impacts borrowers, and largely those in the homeowner segment who rely on large loans to value mortgages. The investment segment is quite separate to this and property investors experience different impacts as a result of changes in the wider economy.

Rent rises

The other side of the impact of interest rate hikes and fewer home buyers is that rents rise alongside the wider trend – with current rental rates at an all time high.

Rents across the UK have increased significantly in the last year alone, and forecasts suggest that they will increase up to 20% in the UK’s major cities in the next five years, particularly Manchester and Birmingham.

The supply of properties available to rent in the current market has also decreased, which means that demand for the shrunken supply is high and tenants are willing to pay the greater rent rates in order to secure a home. Investors can use their rental income to offset the increase in loan repayments following the interest rate rise.

Cash is king

Cash buyers, who don’t require any loans or mortgages to acquire property, will not require, and therefore not be affected by, higher interest loans.

Now is a prime window for cash buyers to buy properties as a large segment of the property investor audience are mortgage buyers who may be taking a step back at this time. Cash buyers can secure traditional property stock and those targeting new builds in the emerging regional city hotspots are encouraged to use savings where possible versus heavily gearing themselves.

Off-plan – Buy now, pay later

Off-plan properties in tier one locations, such as Manchester, Birmingham and Liverpool, is perhaps our busiest asset class at the time. Not only does it mean that you are securing property at the earliest possible stage, and therefore at the best price, but buying off-plan is also beneficial in the current market conditions. This is because off-plan properties can be secured with a deposit, with the rest to be paid upon completion of the site. This means that investors can hold off on applying for a mortgage until closer to the completion date of the site, which can be a few years from the initial launch date.

By securing a unit now with a deposit and funding the rest of the purchase amount closer to the completion date, investors are able to put capital to work, securing the units at the best possible price, and complete at a time when we expect to see the broader market and rates improve.

The fundamental lack of supply, the regional city boom, and the trend of ‘generation rent’ remain. Buying off-plan also means that investors will benefit from the forecasted rent increases across the UK, and investing now in emerging locations such as Stockport, Digbeth and Birmingham’s Southside, means that investors are very likely to reap the benefits of area-wide regeneration and investment projects by the time the developments are fully complete and ready to be tenanted.

Short-term lets and holiday lets

With more and more people favouring AirBnB,, and short-stay apartment options, the UK tourism, or ‘staycation’, sector is booming.

The huge popularity of short-stays in the UK’s most popular towns and cities, especially during a time of increased cost of living which sees UK residents choosing to stay within the country rather than travelling abroad, adds to the yield property owners can expect to generate. At a time of higher interest rates, this is a very good way to hedge.

If you are able to secure a property in a key location that benefits from being able to be operated on a STL basis, you have the flexibility to increase income considerably. We are witnessing existing landlords explore this on current stock, and STL options are perhaps the most popular questions amongst investors looking to add to their property portfolio. Having the option of a good income from short-term letting gives a property more options and will not just see increased income but will likely help to drive appetite on any future resale.


BuyAssociation have been helping property investors since 2005, with a focus on maximising their potential returns in the property market. We have witnessed first-hand the benefits of investing in the right assets at the right times, even following the 2008 credit crunch, the turbulence of Brexit, the COVID-19 pandemic and the current interest rate hikes.

Often these periods of change can bring about the most gain, with active investors who secure the right assets at these periods seeing above average growth. For example, our most recent launch, Sapphire Court in Birmingham is a strong type of property asset to invest in at this time.

Sapphire Court is a flagship development, located in Birmingham’s Creative Quarter, offering one- and two-bedroom apartments and duplex homes. Investors into the off-plan scheme will be benefiting from securing units at the best price point ahead of the market; can secure any funding closer to the time of completion which is expected in Q1 2025; will reap the benefits of increased Birmingham rents and the growth seen in the area following the huge investment schemes; and there is also the option for STL.

As an investment property, Sapphire Court ticks a lot of boxes for active buyers looking to make the most of the current market conditions. BuyAssociation is here to help, get in touch to see how best we can support you with your next property purchase.

Self-certified Sophisticated Investor

Please read

I declare that I am a self-certified sophisticated investor for the purposes of the restriction on promotion of non-mainstream pooled investments. I understand that this means:

I am a self-certified sophisticated investor because at least one of the following applies:

I accept that the investments to which the promotions will relate may expose me to a significant risk of losing all of the money or other property invested. I am aware that it is open to me seek advice from someone who specialises in advising on non-mainstream pooled investments.

High Net Worth Investor

Please read

I make this statement so that I can receive promotional communications which are exempt from the restriction on promotion of non-mainstream pooled investments. The exemption relates to certified high net worth investors and I declare that I qualify as such because at least one of the following applies to me:



Sign-up for first access to new developments and exclusive property investment opportunities.

We send limited and targeted emails on new launches and exclusive deals which best fit your areas. We are trusted by over 30,000 active buyers as their source for new stock.

  • New property developments
  • Professional market reports
  • Property deal alerts
  • Development updates
UK holiday let


Receive trending news straight to your inbox and stay up to date on all of the property market trends and advice.

Established since 2005 we are a leading voice of authority and commentary on the UK property market. Our news is trusted by Apple News & Google News.

  • UK housing market
  • Mortgage & money
  • Buy-to-let landlords
  • Guides & advice

Talk to us

Speak to our UK property experts today:


+44 (0) 333 123 0320

Open from 9am-6pm GMT


+852 6699 9008

Open from 9am-6pm HKT