Yes. Everyone is able to apply for either a postal vote or a proxy vote. This isn't just a measure for overseas voters. It might be that they're away on election day and they've actually provisioned to apply for an emergency proxy vote up until 6 p.m. on the day of the election.
In the early 2000s, the U.K. introduced a range of measures to make voting more convenient and more inclusive. One of those measures was postal voting. Those experiments took a bit of time to get right. There were some concerns about electoral fraud and actually some high-profile cases of electoral fraud relating to postal voting in the early 2000s. Measures were then put in place to close some of those gaps.
As it stands, postal voting and proxy voting are used. Unfortunately, partly because of the way in which the U.K. is very decentralized as to how it runs elections, there is no central number of how many people actually use the proxy votes. One survey suggested that roughly 1% of people thought proxy voting was helpful. I think it is a useful tool for overseas voters, though.