Trump Card? The American Vote & UK Property

Many of us woke up this morning in the same way; one eye half open, then suddenly snatching our phones from the side table, swiping desperately towards the news app. And there it was – President Trump. Love or hate the result, it’s going to trickle on over, or knock through, into the UK property market and affect developers and investors both here and across the pond.

What does this mean for the UK property market?

Short-term, the effects will be similar to the Brexit vote. The first 100 days are likely to be a bumpy ride, with plenty of uncertainty and gritting of teeth. As we saw with Brexit, activity could slow down, with transactions held off pending further developments in policy-making. We have already been experiencing this since Brexit – slow, dense sales processes and a general distancing between vendors and buyers.

This period could also see an increase in property prices, potentially from a flux of Americans looking to exit the UK. American property investors, nervous of the success of a Trump presidential campaign far earlier in the year, had already started to plug their investment into the London property market, with large batches of property in Chelsea and Westminster being snapped up in one go by some investors.

Long-term we could be looking at a period of economic growth, boosted by Trump’s pro-business, pro-trade policies. Business rates, he claims, will go down, and personal tax rates as well. Trump is also anti-EU, which means we could be seeing new trade relationships thriving between the US and UK as we (finally and if so) make the exit.

Protecting your margins

This is a time to check your margins and sensitivity-test your projects. If your margins are low enough to cave under a dip in the market, you need think carefully about whether your project will be worth the work because, as we well know, projects take a lot of work! So it has to be worth it. Follow our next blog for more details on how to sensitivity-test your margins using our price/sqft calculator. In the meantime, join the world in watching what happens next…

Marina Conway-Gordon