UK buy to Let house prices and expat mortgage rates: What’s next in 2026?
For British expats weighing up UK property investment, 2026 has been a year of mixed signals and understanding how the market is changing and why it is key to securing the right expat buy to let mortgage at the right time.
Where buy to let rates stand now
After a period of steady declines in early 2026, buy to let mortgage rates spiked sharply in spring, following renewed Middle East tensions, with average two year fixed rates jumping from the low 4% range to over 5% within a month. Rates have since eased back from those peaks but remain higher than the ultralow deals seen a year ago. Despite this, rental yields have strengthened and demand for mortgages for expats remains resilient, with lenders reporting continued growth in buy-to-let applications.
For landlords, however, rental income remains supportive. Average UK rental yields increased to around 7.20% in early 2026, as rents continued to grow faster than property prices. This could make selected areas outside London particularly interesting for expat buy to let investors seeking stronger rental returns
House Price Outlook
Most major forecasters, including Halifax, Nationwide, Savills and Rightmove expect modest UK house price growth of roughly 1% to 4% over the next 12 months, driven by improving affordability as wages outpace price growth. Regional divergence is expected to widen, with the Midlands and North outperforming London and the South East. Persistent housing supply shortages continue to support rental demand, which is good news for potential expat landlords focused on income over short term capital gains.
What This Means for Expat Investors
For those seeking international mortgages to fund UK property, the coming year is likely bring increased competition amongst expat mortgage lenders around the margin, with more competitive fixed rate deals, especially 5 year fixed rate deals and continued strong rental demand. Working with a specialist broker familiar with the expat buy to let market can help navigate stricter underwriting criteria and lock in favourable terms before rates shift again.
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