But what if some of the factors influencing your investment were being shaped thousands of miles away?

The 2026 US midterm elections have delivered a significant political result, with the Democrats winning control of both chambers of Congress. While President Donald Trump remains in the White House, the political balance in Washington has changed considerably.

So, why should landlords in Somerset, Bath and the wider South West take notice?

The answer lies in the relationship between the US economy, global financial markets and the UK economy. Although American elections do not directly determine British mortgage rates or rental legislation, their consequences can influence the economic conditions in which UK landlords operate.

Here are five areas worth watching.

1. Interest rates and mortgage costs: Could your borrowing become more expensive?

Perhaps the most important consideration for landlords is the potential effect on borrowing costs. The US economy has a significant influence on global financial markets. Decisions surrounding government spending, taxation, international trade and economic policy can influence investor confidence and bond markets. If uncertainty increases, investors may demand higher returns on government debt. This can influence borrowing costs internationally, including the UK.

For landlords, this matters because buy-to-let mortgage pricing is influenced by several factors, including swap rates, gilt yields, lender funding costs and the Bank of England’s monetary policy.

The important distinction is that the Federal Reserve does not set UK interest rates, and neither do the US midterms.

However, movements in global financial markets can feed through into the rates available to British borrowers.

What should landlords consider?

● Review when your existing mortgage deal expires.

● Understand the impact of a higher interest rate on your monthly cash flow.

● Consider whether your rental income provides sufficient protection against increased borrowing costs.

● Avoid assuming that interest rates will automatically fall simply because political uncertainty has changed.

A small change in borrowing costs can make a meaningful difference to the profitability of a highly leveraged rental property.

2. Inflation: Could American trade policy affect your running costs?

One of the biggest economic issues surrounding the US political landscape is trade policy.

Tariffs and restrictions on international trade can increase the cost of imported goods, disrupt supply chains and create uncertainty for businesses.

This could have consequences for the UK through international trade, energy markets and the cost of materials.

For landlords, the potential impact is particularly relevant when considering:

● Building materials and property maintenance.

● Replacement appliances and household equipment.

● Contractor and refurbishment costs.

● General household inflation and tenants’ disposable income.

If inflation remains stubborn, the Bank of England may have less flexibility to reduce interest rates.

This creates a potential double pressure for landlords: higher operating costs alongside continued pressure on mortgage repayments.

It is important to recognise that these effects are not automatic. The impact will depend on the scale of any trade disruption, exchange rates, global demand and the response of UK businesses.

3. The strength of the pound: An overlooked factor for property investors

Another area worth monitoring is the value of sterling against the US dollar.

Political uncertainty, investor confidence and differences between US and UK interest-rate expectations can influence currency markets.

A weaker pound can make imported goods more expensive, potentially adding to inflationary pressures. A stronger pound can have the opposite effect on some imported products.

For landlords, this is unlikely to be a direct issue unless they have overseas investments or financial commitments. However, currency movements can form part of the wider economic picture influencing the cost of running a property portfolio.

It is another reminder that rental property performance is influenced by more than just the local housing market.

4. Investment confidence: Could landlords see opportunities?

The midterm result has created a divided political landscape in the United States. A Congress controlled by the Democrats, alongside a Republican president, could make major legislative changes more difficult to achieve. This may create uncertainty around future economic policy, taxation, government spending and trade. However, political uncertainty does not necessarily mean economic weakness.

Investors will continue to assess the underlying performance of the US economy, corporate profitability, inflation and interest rates.

For UK landlords, the wider question is whether international investment conditions encourage or discourage investment in property and other assets.

If financial markets become volatile, some investors may reconsider their investment strategies. Equally, periods of uncertainty can create opportunities for investors with sufficient capital and a long-term outlook.

For South West landlords, the fundamentals still matter most: local tenant demand, achievable rental income, property condition and the overall return on investment.

5. What does this mean for the South West rental market?

It is important not to overstate the direct impact of the US elections on local property markets.

A change in political control in Washington will not automatically increase rents in Paulton, reduce property values in Midsomer Norton or change tenant demand in Wells.

However, the economic factors influenced by international events can eventually filter down into local markets.

For example:

● Mortgage affordability: Changes in UK borrowing costs can influence landlords’ profitability and prospective buyers’ ability to purchase.

● Rental demand: Higher household living costs can affect tenants’ affordability and the types of properties they seek.

● Property investment: Changes in borrowing costs and investor confidence can influence whether landlords expand, retain or sell their portfolios.

● Maintenance expenditure: Inflationary pressures can increase the cost of maintaining rental properties.

● Rental returns: The relationship between income, expenditure and property values ultimately determines the attractiveness of an investment.

The latest ONS figures show that average private rents in England increased by 4.0% in the year to September 2026. However, rental performance varies considerably between locations, and national figures should never be used as a substitute for a local rental appraisal.

For landlords across Somerset and the wider South West, understanding their individual property’s performance remains essential.

What should South West landlords be doing now?

Rather than reacting to every international political development, landlords should use this as an opportunity to review the resilience of their rental investments.

We recommend considering five areas:

1. Review your mortgage position

Understand your current interest rate, mortgage expiry date and the financial implications of refinancing at a higher rate.

2. Reassess your rental income

Is your property achieving the rent it should be? Has the local market moved since your last rental review?

3. Understand your true running costs

Include management fees, maintenance, insurance, compliance, mortgage interest and periods without rental income.

4. Stress-test your investment

Consider what would happen if your mortgage payments or maintenance costs increased, or if your property experienced a short void period.

5. Review your long-term strategy

Does retaining the property still make financial sense? Would improvements increase its rental potential? Or could selling and reallocating the capital be a better option?

The key is to make decisions based on the numbers rather than headlines.

The Allen Residential view: Look beyond the headlines and understand your investment

The US midterm elections are a useful reminder of just how interconnected the global economy has become.

While the outcome in Washington will not directly determine the performance of a rental property in Somerset, its potential influence on financial markets, inflation, borrowing costs and investor confidence is worth understanding.

For landlords, the most important thing is not to predict every economic development. It is to ensure their investment is positioned to withstand changing conditions.

At Allen Residential, we believe that being a successful landlord is about more than simply collecting rent. It is about understanding your property’s performance, identifying opportunities and making informed decisions about the future.

Is your rental property performing as well as it should?

We are offering a time limited Property Performance Review for landlords, looking at rental income, local market conditions, investment costs and potential opportunities to improve returns.

Whether you are considering retaining your property, reviewing your rental income or simply want a better understanding of your investment, our team is here to help.

Get in touch with Allen Residential to arrange a conversation about your rental property.

Allen Residential where Local knowledge, Professional guidance creates better-informed property decisions.

Paulton office - 01761 412 300 or Wells office - 01749 672 678 or email lettings@allen-residential.co.uk