Skip to main content

Investment Property Interest Rates 2024: What’s the Impact?

This article was updated on Thu 15 Tue 2024

Highrise properties in the UK with increasing interest rates

The impact of investment property interest rates in 2024 is likely to be significant, due to interest rates being a critical factor in determining the overall profitability of any investment property. When low, investors can borrow at a cheaper rate, making it easier to finance a property and guarantee better returns on their investment.

When interest rates are high, however, the cost of borrowing money increases, potentially making it more difficult for investors to generate positive returns. In 2024, the interest rates on investment properties will be influenced by numerous factors, including the level of demand for investment properties and especially the overall health of the economy.

Rising inflation and investment property

If the economy improves and investors see a demand for properties, interest rates are likely to remain low. But with inflation still brewing, the economy may still be in for a bumpy road ahead. As of November 2023, the Bank of England have chose to maintain the interest rate at 5.25%, with a view to return to 2% in two years time.

Despite the potential challenges, there are also opportunities for investors who can adapt to the ever-changing market conditions. For example, investors who secure financing at a fixed rate, rather than a variable interest rate, may be able to avoid some of the negative effects of rising interest rates.

Likewise, investors who can identify properties that have strong potential for appreciation and rental income may be able to generate a positive return on their investment, even in a challenging economic environment.

Investment property prices

In 2022 article by ftadviser.com, Hina Bhudia, Partner at Knight Frank, states: ‘’On a monthly basis, UK house prices have just started to soften, but each market and property type is going to fare differently. Our forecasts suggest UK house prices will fall 5% in 2023 and again in 2024 before returning to growth.’’

While property prices adjust to world changes, you can expect a rise in the long run. Experts forecasted a 2% increase in 2024 which evidence shows is moving to trend up North, and 4%  in 2026. So while demand and supply for purchasing properties are relatively low with property sales almost halving in most areas in the UK, tenants looking to rent are on the up, and more than happy to pay good money for a high-quality home, making buy-to-let investments open to impressive profits in 2024.

Locations to watch out for

As data continues to highlight opportunities despite the downfalls, buy-to-let investors, especially those with experience, should take advantage of the UK property market in 2043 and focus on key areas to get the best results.

Birmingham and Manchester are some of the best areas to invest in buy-to-let properties in 2024, due to high rental demand and incredibly affordable property prices, as well as Leeds and Liverpool. In 2024, the north is the place to set your sights on if you want to overcome market challenges.

Working with the impact

Overall, the impact of investment property interest rates in 2024 will encourage investors to carefully consider the potential risks and opportunities associated with the changing market conditions. By staying informed and being proactive, investors can position themselves to capitalise on the available opportunities and mitigate the risks associated with higher interest rates.

Talk to Knight Knox

At Knight Knox, research has shown that Northern cities continue to prove their economic worth and show why investors are moving away from the capital in favour of cities like Manchester, Liverpool, and Sheffield, especially when the market seems uncertain. Get in touch with us today to learn more about investment opportunities.

    Are you interested in investing in property?

    Request a callback to discuss investment opportunities with one of our property experts.


    We respect our clients' privacy. Your personal details will not be shared with third parties. By submitting your details you consent to being contacted by Knight Knox by telephone and email for this and similar marketing material.


    Other Investment Opportunities

    • Read More +

      Waterview Place

      Prices from:
      £90,000
      Property type
      Holiday Let
      Location
      Whitehaven

      Investment Highlight

      These luxury waterside apartments can earn returns of 13% NET Yield

      View Property
    • Read More +

      Otterbirch Wharf

      Prices from:
      £182,000
      Property type
      Assisted Living
      Location
      Beverley

      Investment Highlight

      The apartments at Otterbirch Wharf offer 10% NET yields for 25 years

      View Property
    • Read More +
      Harworth House assisted living properties

      Harworth House

      Prices from:
      £156,000
      Property type
      Assisted Living
      Location
      Doncaster

      Investment Highlight

      The apartments at Harworth House offer 10% NET yields for 25 years

      View Property
    • Read More +

      Coltran Mill

      Prices from:
      £199,995
      Property type
      Assisted Living
      Location
      Mexborough

      Investment Highlight

      The houses and apartments at Coltran Mill offer 9.1% NET yields for 25 years

      View Property
    • Read More +
      Doncaster - Croft Court Listing

      Croft Court

      Prices from:
      £191,579
      Property type
      Assisted Living
      Location
      Doncaster

      Investment Highlight

      Croft Court offers a 25-year rental lease with 9.5% yields and annual inflation-linked rent rises

      View Property
    • Read More +
      Vision

      Vision

      Prices from:
      £86,995
      Property type
      Student
      Location
      Huddersfield

      Investment Highlight

      Vision offers 10% assured NET returns for 3 years

      View Property