Trump’s Tariffs and UK Property: An Unlikely Upside

President Trump’s announcement of sweeping tariffs—including a 10% levy on UK imports—has sent shockwaves through global markets. For the UK, these measures present an economic paradox: while trade tensions threaten to dampen growth, they could also prompt a more favourable monetary response. Traders are now pricing in the likelihood of multiple interest rate cuts from the Bank of England this year, with market expectations leaning toward three reductions. The rationale? Slower growth triggered by tariffs may force policymakers to act swiftly to support the economy.

This unexpected shift is already influencing the UK mortgage market. Falling swap rates suggest lenders could soon reduce fixed-rate mortgage pricing, potentially offering relief to homeowners struggling with high living costs. While the broader impact of tariffs remains uncertain, a more competitive lending environment would be welcome news for the housing sector. Yet, the overall picture remains complex. Some analysts warn that although rate cuts may support activity, inflationary pressures and heightened economic caution could limit house price growth. As the market recalibrates to new stamp duty thresholds and global headwinds, 2025 may see steady sales volumes—but with a more subdued pace of price increases than initially forecast. The intersection of geopolitics and real estate is once again proving both volatile and full of surprises.