America Decided

With Donald Trump winning the 2024 U.S. presidential election, this week's blog focuses on how the new administration may affect our UK housing market in 2025 and beyond and its potential impacts on international investment. The goal here is to look a bit deeper, and while the connection between a U.S. president and UK housing might not be immediately apparent, U.S. policies often have ripple effects in global financial markets, trade, immigration, and energy — all of which play a role in shaping housing production in the UK. Here are some less-than-apparent ways that Trump's presidency might impact our sector and any positives we can glean from these predictions.

Starting with a potential negative for balance, a Trump-led economic policy might involve large-scale fiscal spending, protectionist trade stances, and tax incentives for domestic investment. These could stimulate U.S. inflation, potentially leading to a rate hike by the Federal Reserve. Rising U.S. interest rates often encourage global investors to pull funds from other markets, including the UK, to capitalise on higher yields in the U.S. This capital flight could result in less available investment for UK housing, limiting financing options for new housing projects and increasing borrowing costs, which may curb housing production.

On the flip side of the above, Trump’s policies may also encourage increased U.S. energy production, especially oil and gas, which could lower global energy prices. This change would make materials like concrete, steel, and bricks cheaper to produce or import. Lower energy costs generally reduce construction costs, which might incentivise UK developers to build more homes. There is always the concern of supply chain disruption through the pursuit of trade wars, but there is no evidence to suggest that this will be on the mandate this time around.

The new Trump administration would likely reinforce restrictions on U.S. immigration, potentially encouraging a reverse flow of skilled labour back to countries like the UK. This shift could partly ease the UK’s labour shortages in construction, a sector that has faced significant staffing challenges since Brexit. Access to a broader workforce could expedite housing projects, but only if UK policies also facilitate immigration for skilled labour. Additionally, as more people return to the UK, housing demand might increase, influencing both the urgency and volume of housing production.

Trump’s previous tenure included policies encouraging U.S. companies to repatriate earnings and limit overseas investment. He might push for similar policies, making it less attractive for U.S. firms to invest in foreign assets, including UK property. This could slow the influx of American capital into the UK housing market, which is traditionally a source of funding for large-scale projects, particularly in London. Without this capital, UK developers might face more significant financial constraints, limiting housing production.

The U.S. dollar is a global "safe haven," and if Trump’s policies destabilise international relations or fuel market volatility, investors may flock to the dollar. If Trump’s economic policies prioritise U.S. interest rates, a strong dollar could lead to an appreciation of the British pound relative to other currencies. A stronger pound would make imports of construction materials, technology, and equipment more affordable for UK developers, reducing costs and potentially accelerating housing projects. This financial advantage could be particularly beneficial in reducing the expense of innovative technologies and sustainable materials, which are often imported.

Trump has previously rolled back environmental regulations to promote industry and might take a similar approach this time around. This could impact global trends toward sustainable building practices. Should the U.S. move away from green construction standards, other countries might also relax their own policies to stay competitive. For the UK, decreasing global demand for sustainable building materials or renewable energy sources could lower costs, making sustainable housing more financially viable. However, it could also dampen incentives for adopting green technologies in housing, particularly if prices fluctuate erratically.

Trump has historically favoured tariffs and protectionism, which could strain U.S.-China relations. Many materials used in UK construction—from smart-home technology to prefabricated building materials—originate in China. Disruptions in U.S.-China trade can create global supply chain bottlenecks, potentially delaying UK housing projects or increasing costs. This is especially relevant for technology-heavy developments such as smart buildings, as tariffs or sanctions could impact access to affordable electronics and construction components.

Focusing finally now on P2P, global wealth custodians often turn to international real estate and its associated asset classes during uncertain times, and Trump’s policies might spur further investment in UK real estate as a hedge against potential market volatility in the U.S. Historically, UK real estate has been seen as a haven for global capital. If more foreign investors pour money into the UK housing market, this influx of funds could support housing development, particularly in larger cities, and we believe that P2P will provide the mechanism for this capital to flow.

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