Impact of US Tariffs on UK Property Investors: A Market Analysis

President Trump’s long-trailed “Liberation Day” announcement has now materialised, confirming the US will impose a set of new tariffs on imports — including a 10% tariff on UK goods, under what the White House is calling a “kind reciprocal” system.

While not a direct blow to the UK housing market, the news reflects a broader shift toward protectionist global trade policy — and it introduces another layer of uncertainty into an already sensitive economic environment.
For property investors, it’s another reminder of how global events can filter into the supply of credit, pricing, and sentiment. But it’s also a moment to reinforce a core truth: the case for UK property remains rooted in relative value, scale and long-term fundamentals — and those haven’t changed.

Markets Showing Signs of Stress, but Not Panic

Since the US tariff announcement, financial markets have begun reacting — not dramatically, but with a clear tilt toward caution. It’s too early to call the full picture, but early signals suggest investors are reassessing the outlook across several fronts:

• Interest Rate Expectations - The GBP 5-year Swap Rate has moved meaningfully lower — down around 10 basis points since the announcement — suggesting markets may be revising expectations for future Bank of England moves. The shift implies rate hikes are much less likely and that there is a tilt toward a more accommodative monetary stance if macroeconomic risks intensify.
• Equity Sentiment – The FTSE 100 and other major indices have opened lower, with risk-sensitive sectors — like banking and mining — seeing the sharpest falls. That pattern aligns with broader concerns about global trade flows and growth prospects.
• Safe Haven Behaviour – Gilt yields are edging down, and gold prices are climbing — both traditional indicators that investors are taking a more defensive posture as uncertainty increases.
• Currency Markets – The pound has been relatively strong against the US dollar so far, and is up over 5% YTD and up over 1% on the day, consistent with capital inflows to Gilts, but importantly, supporting some evidence that the UK may prove to be fertile hunting ground for investment opportunities  — clearly, volatility could rise if sentiment worsens, but equally, if the government pulls off a trade deal with the US we could see the currency strengthen further.

We’ll continue to monitor how these indicators evolve, but the early read is clear: UK markets are alert, not alarmed. Investors are repositioning, but there’s no sign of panic. That said, the tone has shifted — and the property sector, like all others, should be mindful of how that plays out.

Q2 Pause Still Expected, with Q3 Set to Rebound

As we outlined in our Spring Statement update, the UK property market was already expected to soften slightly into Q2. That’s largely due to timing: completions were pulled forward into Q1 ahead of stamp duty changes, and the Help to Buy mortgage guarantee scheme ends in June.

But the medium-term picture remains encouraging. Forward rate pricing suggests a Bank of England base rate of ~4% by September — down from 4.5% today. That shift, alongside early signs of real wage growth and easing inflation pressures, should improve affordability into the second half of the year.

Regional Divergence and Signs of Long-term Value

House price growth remains uneven across the country, with London and the South East continuing to underperform other regions. That said, these markets have historically led recoveries, and pricing in subdued areas may represent attractive entry points for investors with a longer view.

Whether your customers are retrofitting older stock, building out small sites, or acquiring BTL units in yield-positive locations, there are still plenty of viable strategies — even in a more cautious investment environment.

Property Remains a Steady Hand in a Noisy World

A 10% US tariff on UK exports makes headlines, and understandably so. But its direct impact on the UK property market is minimal. What matters more is how markets react — and thus far, the reaction has been clear but controlled.

While we’re seeing signs of risk-off behaviour and re-pricing across credit and rate markets, we’re also seeing continued appetite for asset-backed investments. That includes ongoing activity in the UK securitisation market, with tranches oversubscribed and spreads in line with YTD levels — a positive signal that confidence in UK mortgage-backed assets remains intact.

At LendInvest Mortgages, our view is simple: short-term volatility shouldn’t distract from long-term opportunity. The UK housing market remains structurally underpinned by supply constraints, rental demand, and improving affordability — and we continue to support experienced investors in delivering the homes the UK needs.



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