Britain’s housing market is being held back by concerns over Donald Trump’s trade wars.
Demand last month weakened to its lowest level since 2023 partly due to ‘international economic uncertainties’, according to a monthly report from the Royal Institution of Chartered Surveyors (RICS).
These included fears about the potential impact of swingeing tariffs on US trading partners, creating market turmoil.
Other factors include changes to stamp duty next month, and fear of inflation, which hit a ten-month high of 3 per cent at the start of this year and is predicted to head towards 4 per cent by the autumn.
Simon Rubinsohn, the chief economist at RICS, flagged up fears of US actions and added: ‘Housing appears to be losing some momentum as the expiry of the temporary increase in stamp duty thresholds approaches.’
The report showed a reading of buyer demand fell to minus-14 per cent in February, down from minus-1 per cent in January and the weakest since November 2023.
Trump effect: Demand in the housing market has fallen partly due to ‘international economic uncertainties’, according to a report from the Royal Institution of Chartered Surveyors
House prices continued to rise, but at a slower pace, the figures suggested. A reading for price growth fell from plus-21 per cent in January to plus-11 per cent last month – the second decline in a row.
The RICS figures represent one of the first signs that, even if Trump does not directly target the UK with tariffs, a tit-for-tat global trade war may be making British households wary of making big financial commitments.
The Prime Minister’s cordial recent meeting with Trump has fuelled hopes that Britain may escape the US President’s wrath.
However, British industry will still fall foul of a 25 per cent tariff on the steel and aluminium imports.
And the potential knock-on impact of huge tariffs imposed specifically on China, Canada and Mexico is unknown.
Some fear a recession or ‘Trumpcession’ for the world’s biggest economy.
William Bain, head of trade policy at the British Chambers of Commerce, said the imposition of steel tariffs would plunge business in the UK and US ‘into a new age of uncertainty’, adding: ‘A series of tit-for-tat tariffs could easily spiral into an all-out trade war and do the UK little benefit.’
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