Falling Mortgage Rates, Rising House Prices, and Fewer Landlords: What This Means for UK Property Investors
The UK property market has started 2024 with a bang. Mortgage rates are falling, house prices have recorded their strongest January growth on record, and more landlords than ever are leaving the market.
At first glance, that mix of headlines can feel confusing some positive, some alarming. But when you zoom out and connect the dots, a clear picture starts to form. And for expat property investors and those looking to build portfolios over the next 12 months, that picture is far more opportunity than threat.
Let’s break down what’s happening and, more importantly, what it means for you.
1. Falling UK Mortgage Rates: What It Means for Your Cash Flow
Following the Bank of England’s December base rate cut to 3.75%, major UK lenders have begun reducing mortgage rates. HSBC, NatWest, Halifax, Skipton, Dudley Building Society, TSB and others have all announced cuts, increasing competition and improving affordability for borrowers.
A recent UK article highlighted how lenders such as NatWest and Halifax moved quickly to cut mortgage costs after the rate reduction, signalling a shift in sentiment across the market:
What does this mean in practical terms?
Variable-rate mortgage holders will see immediate benefits.
A 0.25% rate cut saves roughly £40 per month on a £200,000 mortgage that’s nearly £500 a year back in your pocket.Fixed-rate borrowers should start reviewing options.
With rates trending downward, many investors may benefit from refinancing or switching to more flexible products when possible.Property investors gain stronger cash flow.
Lower interest costs mean higher monthly surplus, making deals more cash-flow positive and accelerating portfolio growth through compounding.
Mortgage affordability also improves. Lenders typically stress test buy to let mortgages at around 140% of the pay rate. As interest rates fall, stress tests ease, allowing investors to borrow more and unlock better deals.
Bottom line: falling rates improve affordability, cash flow, and long term portfolio scalability.
2. UK House Prices Hit Their Strongest January on Record
UK house prices rose 2.8% between December and January, according to Rightmove the largest January increase since records began.
So what’s driving this?
Pent-up demand returning after months of uncertainty
Improved buyer confidence following the Autumn Budget
Lower mortgage rates, boosting affordability
There was concern that recent policy changes would severely damage the housing market. While taxes on personally owned rental property did increase, the overall impact was far less dramatic than expected.
If anything, it has reinforced a long-standing truth for serious investors: structure matters. Using a limited company for property investment is now more important than ever for tax efficiency and long term resilience.
As confidence returns and borrowing becomes cheaper, more buyers are entering the market. With housing supply largely unchanged, increased demand is naturally pushing prices upward.
3. Fewer Landlords: Why This Is Actually an Opportunity
Around 200,000 landlords exited the UK market last year, a drop of roughly 33%, bringing landlord numbers to their lowest level since 2007.
At face value, that sounds alarming. But context is key.
Why are landlords leaving?
Stamp duty increases for buy-to-let and expat investors
EPC and regulatory changes
Removal of mortgage interest relief for personally owned properties
Higher interest rates over recent years
A further 2% tax increase on rental income held in personal names
Many exiting landlords are accidental, under-capitalised, or poorly structured. This isn’t the end of buy to let it’s a market reset.
What does basic economics tell us?
Fewer landlords = less rental supply
Demand for rentals continues to rise
Result: rents go up
And that’s exactly what we’ve seen. Rents have been increasing steadily for the past four to five years.
Add to this:
Around 4.7 million households still rent privately
First-time buyer affordability remains stretched
The UK is missing its 300,000 home annual building target by around 100,000 homes per year
Supply is shrinking. Demand is growing. Rents continue to rise.
What This Means for Expat Property Investors
For expat investors who are set up correctly, the current market conditions are highly favourable.
The opportunity lies in:
Using limited companies to manage tax efficiently
Buying high yielding properties in strong rental locations
Focusing on areas with solid Population, Infrastructure, and Employment (PIE) fundamentals
Providing quality, affordable housing to good tenants
When you combine:
Falling interest rates
Rising rents
Increasing house prices
Reduced competition from exiting landlords
…you create an environment where cash flow improves and capital growth accelerates.
Final Thoughts
For expat property investors looking to build or scale portfolios over the next 12 months, the conditions are aligning: improving affordability, stronger cash flow, rising rents, and renewed demand.
If you’re interested in learning how to structure a UK property portfolio as an expat, or how to start building from overseas, drop a comment below or send me a message. I’ll share a resource that many of my clients find invaluable when investing in UK property from abroad.
Join Us at Our International Expat Property Events
f you’re not currently based in the UK, you’re not alone. Many of the investors we work with live overseas, which is why we host international property investment events specifically for expats.
These events cover:
How to invest in UK property from abroad
Structuring portfolios correctly as an expat
Current market opportunities and strategies
Networking with other overseas investors
You can view our upcoming international events here:
https://www.propelglobal.co/events
Whether you’re just getting started or looking to scale an existing portfolio, these events are designed to give you confidence, and a clear plan of action.