Skip to content

Investing in property has long been a stalwart of wealth building, offering both stability and potential for significant financial gains. With so many external factors creating turbulence in the UK property market, many prospective investors are wondering: Is UK property still a good investment? In this comprehensive guide, we'll dissect the current economic landscape, analyse recent statistics, and provide insights into why property investment, especially wiith the right education behind you, remains an enticing opportunity.

What are the factors affecting the housing market in the UK?

The following factors play a significant role in shaping the current landscape of the UK property market and should be considered by investors and those interested in property investment:

  1. Rising interest rates: The Bank of England has been increasing interest rates to combat inflation, which affects borrowing costs for property investors.
  2. Inflation rates: Inflation has been a concern, but there are indications that it may start to decrease, potentially providing relief for investors.
  3. Mortgage rates: With the rise in the base interest rate, mortgage rates are experiencing upward pressure, impacting affordability for buyers.
  4. UK house prices: Despite some slowing in growth, average house prices in the UK continue are rising and property investment remains an attractive option.
  5. Political climate: The Conservative government's struggle to control inflation and cost of living suggests the potential for a change in government in the next election, which could have implications for landlords.
  6. Cash vs. mortgage: Cash remains advantageous for investment due to stability and avoiding the risk of rising mortgage rates, but different strategies can still yield profits.

What are UK Interest Rates Going to Do?

From mortgage rates to rental yields, these rates have a significant influence on the market. Stay in the know with the Bank of England's base rate, as its upcoming review holds the power to shape market sentiment. 

Currently, interest rates in the UK are on the rise as the Bank of England works to combat inflation and maintain economic stability. The recent increase in the base interest rate to 5.25% has led to higher borrowing costs for investors. 

But there may be some good news on the horizon. Inflation rates are showing signs of decreasing, which suggests that interest rates may soon reach their peak and begin to decrease. This is welcome relief for property investors, as lower interest rates can make borrowing more affordable and even stimulate market activity. 

To make informed investment decisions in the UK property market, it's crucial to stay updated on interest rate trends and how they correlate with inflation.

Bank of England Base Rate Next Review

The next review will be held on the 21st September 2023.

Sep 20, 2023 11:00:00 PM


Are Inflation Rates Going Down?

Inflation rates directly affect the value of money over time. Inflation may be easing more quickly than initially anticipated. The recent data released by the ONS reveals that the core inflation rate dropped to 6.8% in July, down from 6.9% in June. Even more significantly, Consumer Price Inflation reduced to 6.8% in July - its lowest level since February 2022 and representing a large reduction from the peak of 11.1% in October 2022.

The latest calculations suggest that underlying price pressures are showing signs of easing, increasing the likelihood of the Prime Minister delivering on his promise to reduce the headline rate of inflation to around 5% by year-end. This shift in inflation dynamics could provide relief for consumers and businesses alike.

These findings align with the broader global trend of easing inflation rates, offering some optimism for economic stability and growth.

Are Mortgage Rates Going Up?

Mortgage rates directly impact the cost of property ownership and investment. Recent moves by major lenders, like Nationwide cutting mortgage rates by 2%, herald an increased number of competitive rates returning to the market . Monitoring these rates and potential changes is essential for maximising your investment potential.

Where Can I Find the Best Mortgage Rates?

Finding the best mortgage rates requires careful research. One viable option is to use a mortgage broker, though you will need to ensure that your choice of broker is well versed in the options available for property investors such as buy to let mortgages and lenders that will offer finance to limited companies.

Another option is to utilise mortgage comparison tools to assess various offers and identify lenders offering favorable terms. Platforms like Moneyfacts Compare can help you navigate through different options and secure a mortgage that aligns with your investment goals.

What’s Happening to UK House Prices?

The latest house price data, recently published on GOV.UK by HM Land Registry (HMLR) for June 2023, reveals some interesting insights. According to the provisional estimate, average UK house price annual inflation stood at 1.7% in the 12 months leading up to June 2023. This data indicates that, with only 4 months left of the year, the anticipated crash in house prices has not yet materialised and property remains a stable asset. When combined with effective property investment strategies, property continues to be a lucrative choice for investors.


Is Now a Good Time for Cash Buyers?

The latest research by Savills shows that cash buyers have a huge advantage right now. While mortgage rates have increased, investors relying on mortgages have had to recalculate for finance costs, and to ensure that their investments are still going to have decent ROI. According to their research vast majority (72%) of cash buyers have kept their budgets the same whilst almost 60% of those using >50% debt have reduced their budgets. 

“Cash buyers who are not exposed to concerns around rising interest rates have been able to drive ahead strongest in the current market – with a lower proportion of those buying at the top end (£2m+) stating that they have reduced their budget (18%) this month. As a result, established prime markets most synonymous with equity-rich buyers are holding up the strongest amid mortgage market turbulence.” - Frances McDonald (Savills)

Additionally, cash buyers may have more negotiating power and can move quickly on investment opportunities. With the potential for market shifts on the horizon, having the ability to make swift and strategic cash purchases can position investors for success.


What Alternatives Are There to Residential Property Investment?

While residential property investment remains popular, commercial property presents an alternative avenue for diversification. Commercial properties, such as office spaces, retail outlets, and industrial units, offer unique advantages, including longer lease terms and potentially higher rental yields. Commercial property can provide stability even in the face of residential market fluctuations.

Political Climate and Future Outlook

It's worth considering the political climate and its potential impact on the property market. The current Conservative government's struggle to control inflation and the cost of living crisis may result in a change of government in the upcoming election. Historically, Labour governments have implemented policies less favourable to landlords and with Keir Starmer’s promise of “No more buy-to-let landlords or second homeowners getting in first” the impact on property investment is yet to be realised. Staying informed about political developments and adapting your investment strategy accordingly is crucial for long-term success.

The Power of Education in Property Investment

Is UK property still a good investment? As we've explored in this guide, the answer is a resounding "yes." 

Despite economic fluctuations, property investment remains a resilient and potentially lucrative avenue for wealth building. Whether you're considering residential or commercial property, informed decision-making is paramount. By staying abreast of interest rate trends, inflation rates, and house price movements, you can position yourself for success. And remember, the best way to make the most of your property investment journey is to equip yourself with the right knowledge through education.

Whether you're a seasoned investor or just starting out, education is the key to success in the property market. With changing political climates and economic uncertainties, having a solid understanding of market dynamics, investment strategies, and risk management is essential. Touchstone Education offers a comprehensive property investment training course that equips you with the knowledge and tools to thrive in any market condition.

Ready to take your property investment journey to the next level? Join our upcoming LIVE webinar with Paul Smith, "How To Outsmart A Labour Government: Master Commercial Property for 6-Figure Gains," and discover how you can thrive in any market environment. 

Flip or Flop: The Ultimate Guide to Property Flipping

In this amazon best-selling step by step guide, Abi Hookway teaches you everything from formulating an effective property flip strategy, to preparing the perfect exit strategy to generate maximum returns in as little as 6 months. 

Get Your Flipping Good Read!

flip or flop book-1

Wealth Through Property Book

Paul Smith's Wealth Through Property is an essential guide for modern investors. Providing tried and tested tactics to make the most of today's property market, this book provides key information about how you can manage your own time, be your own boss and keep more of what you earn.

I Want Wealth Through Property!

wtp book

Serviced Accommodation Success Manual

Paul Smith’s “how to” guide designed to support you as you navigate the world of serviced accommodation. This popular serviced accommodation book will teach you how to source properties, and where to market your business, as well as the best practices for running a successful serviced accommodation business through platforms like and Airbnb.

I'd Like Serviced Accommodation Success!

sa manual

The Latest in Property Investments

Visit Our Blog
Sustainable UK Property Investing: Environmentally Friendly Choices

Sustainable UK Property Investing: Environmentally Friendly Choices

As a UK property investor, you may be wondering if investing in a sustainable portfolio is worth...
UK Interest Rates Rise Again: Can Property Investors Still Profit?

UK Interest Rates Rise Again: Can Property Investors Still Profit?

Do you invest in UK property? Brace yourself – interest rates have just been hiked for the 13th...