More properties for sale mean buyers have more choice

Kate highlighted a substantial increase in the number of homes available for sale. More stock can help transactions because buyers have a better chance of finding a property that suits them. However, it also creates greater competition between sellers.

A buyer who has six suitable properties to choose from does not need to compromise in the way they might when only one or two homes are available.

Price, presentation, condition and location have therefore become increasingly important. For Cambridge landlords who need to sell, this means the property must be realistically priced from the beginning. An ambitious asking price may result in a long marketing period, lost rent and further reductions later.

For investors, the same conditions may create an opportunity. Prices are no longer running away from buyers, and some owners are becoming more realistic about what their property is worth. Investors who are ready to proceed may therefore be able to purchase properties that would previously have attracted intense competition.

The opportunity is not simply to buy a discounted property. It is to buy the right property, on the right road and at a price that supports the expected rental return.

Could weaker Cambridge prices create an investment opportunity?

Cambridge property values are high compared with St Ives, Huntingdon, St Neots, Peterborough and many other parts of Cambridgeshire.

Because of this, Cambridge has been more exposed to the affordability pressures caused by higher mortgage rates. Kate’s view was that this should not necessarily concern a long-term investor.

Looking only at property performance since the market peak in 2022 can make the picture appear disappointing. Looking over a much longer period provides a very different perspective.

Across much of the East of England, property values have generally kept pace with or exceeded inflation over the longer term. That is one of the reasons property should be viewed as a long-term investment rather than a quick way to make money.

For someone considering property investment in Cambridge, a period of slower capital growth may make previously unaffordable opportunities more achievable. However, not every Cambridge property will produce a good return.

An investor must consider:

• The purchase price
• The realistic monthly rent
• Service charges and ground rent
• Maintenance and refurbishment costs
• Mortgage payments
• Likely resident demand
• The potential void period
• Future resale demand

A Cambridge city-centre flat, a three-bedroom house in St Ives and a family home near Huntingdon are entirely different investments. Each could perform well, but for different reasons.

What is happening in the Cambridge rental market?

While sales-price growth has been weaker, rental demand across Cambridge and Cambridgeshire remains an important part of the investment picture.

The Cambridge rental market benefits from a broad range of residents, including people working in technology, life sciences, education, healthcare and research. Many are relocating to Cambridge for fixed-term roles or projects. They may not intend to buy because they expect to remain in the area for only a few years. For these residents, renting is a practical choice rather than a second-best option.

Cambridge also continues to attract international employees and academics who may have limited UK credit history but strong incomes and good employment prospects. This creates ongoing demand for well-presented, appropriately priced rental properties. However, demand does not mean that every property will let immediately.

Residents now have more choice than they did during the most competitive periods of the rental market. Presentation, condition and pricing therefore matter. An experienced letting agent in Cambridge should be able to explain not only the average rent for an area, but what similar properties are genuinely achieving and how long they are taking to let.

Why regular rent reviews matter

Kate also discussed the importance of regular, evidence-based rent reviews.

Many landlords avoid increasing the rent because they value a good resident and do not want to damage the relationship. That is understandable. The difficulty comes when the rent remains unchanged for several years while mortgage costs, insurance, repairs, contractors and compliance costs continue to rise. Eventually, the landlord may need to impose a large increase simply to bring the property back towards the local market level.

A modest annual review is normally easier for both the landlord and the Resident to manage than a sudden increase of £200 or £300 after several years. Rent increases should always be based on genuine local evidence. The rent being advertised for a newly refurbished Cambridge home may not be a fair comparison for an older property with a dated kitchen or bathroom.

Professional property management in Cambridge should include monitoring the local rental market, assessing the property’s condition and recommending a reasonable figure supported by evidence.

Which Cambridge rental properties are performing well?

Two- and three-bedroom houses have traditionally formed the core of many Cambridgeshire rental portfolios. They often appeal to households looking for stability, schools, outside space and longer tenancies. However, Kate’s analysis also found encouraging performance from some one-bedroom and four-bedroom properties.

Larger homes can work particularly well where there is limited rental supply and demand from senior professionals, corporate relocations or families moving into the Cambridge area. Many four-bedroom rental homes began as family properties rather than deliberate investments. However, that does not mean they cannot produce a strong rental return. Equally, a well-located one-bedroom property may perform successfully if it is close to transport, employment or Cambridge city-centre amenities.

There is no single “best” property type. The correct choice depends on the road, location, purchase price, condition, target resident and the landlord’s investment objective.

The wider Cambridgeshire economy remains encouraging

Cambridge and the surrounding area benefit from strong employment sectors, growing populations and continued investment. Life sciences, technology, research, education and developing employment sites such as Alconbury Enterprise Campus continue to bring people into the region.

The local resident market is also changing. More older people may choose to rent after selling a family home, perhaps to move closer to children or to divide their time between the UK and another country. Landlords refurbishing a property should therefore consider whether it will work for a wider age range.

Simple decisions such as accessible showers, sensible flooring, easy-to-maintain gardens and good lighting could help a property appeal to residents who wish to remain there for many years.

Should Cambridge landlords buy, hold or sell?

There is no single answer. The right decision will depend on:

• Why the landlord originally invested
• Whether they need income or capital
• The property’s current return
• Its mortgage position
• Likely maintenance costs
• Their tax circumstances
• Their future plans
• Whether the property still suits local demand

A landlord may decide that a Cambridge property with weaker short-term capital growth is still worth retaining because it produces reliable rent and has strong long-term potential.
Another may decide that selling one property would allow them to repay borrowing, release capital or invest in a different part of Cambridgeshire offering a stronger income return.
The decision should be based on the individual property and the landlord’s circumstances and not a national headline.

Talk to a Cambridge letting and property management specialist

National reports can tell you what happened across the UK several months ago. They cannot tell you what residents are requesting in Cambridge today, which roads are achieving the strongest rents or whether your particular property is still performing as it should.

At Maxine Lester Lettings and Property Management, we work with landlords and investors across Cambridge, St Ives, Huntingdon and the surrounding Cambridgeshire area.

We can help you understand:

• The realistic rental value of your property
• Current Cambridge resident demand
• How your property compares with the local market
• Whether improvements could increase its appeal
• Whether you should buy, retain or consider selling
• How to protect the long-term performance of your portfolio.

Whether you already own a Cambridge rental property or are thinking about investing in the area, speak to us before making your next decision.

A short conversation about what is actually happening in the Cambridge property market could help you avoid an expensive mistake, or identify an opportunity others have missed.