How Trump's Trade Deal May Impact The UK Housing Market

In early April 2025, U.S. President Donald Trump announced a series of sweeping import tariffs, including a 10% levy on goods imported from the United Kingdom. These measures, part of what he termed “Liberation Day,” have introduced significant uncertainties into the global economy, with potential ripple effects on various sectors, including the UK housing market.

Potential Impacts on the UK Housing Market

The introduction of these tariffs could influence the UK housing market through several channels:

1. Economic Growth and Consumer Confidence: The tariffs are anticipated to suppress UK economic growth by making exports to the U.S. more expensive and less competitive. This slowdown could lead to increased unemployment and reduced consumer spending. As Richard Donnell, Executive Director at Zoopla, noted, the housing market is closely tied to the broader economy. A deceleration in economic activity may dampen buyer confidence and housing demand. 

2. Inflation and Interest Rates: The Bank of England faces a delicate balancing act. While a slowing economy might prompt considerations for interest rate cuts to stimulate growth, the tariffs could also lead to higher import prices, fueling inflation. Elevated inflation may deter the Bank from reducing rates, potentially keeping mortgage rates higher than they might otherwise be, thereby affecting affordability for prospective homebuyers. 

3. Construction Costs and Housing Supply: Tariffs on imported materials can increase construction costs. In the U.S., similar tariffs have been projected to add approximately $9,200 to the cost of a new home.  While the direct impact on UK construction costs is less clear, any increase could slow down housing development, exacerbating the existing supply-demand imbalance in the market.

4. Investment Flows and Market Sentiment: Interestingly, in the immediate aftermath of the tariff announcements, UK real estate stocks experienced a lift. Investors may perceive UK property as a safer asset amid global market volatility, potentially increasing demand in certain segments of the housing market. 

Looking Ahead

The full impact of the U.S. tariffs on the UK housing market will unfold over time and will depend on various factors, including the duration of the tariffs, potential retaliatory measures, and broader geopolitical developments. Stakeholders in the housing market should stay informed and consider both the immediate and longer-term implications as the situation evolves.

As always, here at Match Estates we try and stay ahead of industry news before it hits the general public. For more information, or to keep up to date, give us a call on: 01303 475085.

Sources:

Sky News

House Of Lords Library

The Independent

Business Insider

CoStar

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