According to Compare My Move, UK house prices historically perform worse under Republican US presidents compared to Democrat presidents, with three main reasons:
- Timing and Global Context
- Democrat presidencies, such as Obama’s post-2008 recovery and Biden’s post-COVID boom, coincided with periods of economic recovery.
- Republican terms, like Trump’s, tend to align with more protectionist policies that can suppress global growth.
- International Trade
- Democrat administrations promote international cooperation and trade, benefiting UK exports and overall economy.
- Republican protectionism (“America First”) reduces UK economic growth and housing demand.
- Dollar Strength and Interest Rates
- Democrats often pursue higher government spending, stabilising the US dollar and reducing inflationary pressures on the pound.
- A stronger pound helps the Bank of England keep interest rates lower, resulting in affordable mortgages and healthier house price growth.
Predicted Impact of Trump’s Second Term (2025-2029)
- Weaker UK Housing Market:
- Higher economic uncertainty due to reduced international cooperation.
- Potentially higher mortgage rates as the Bank of England responds to inflationary pressure on the pound.
- Stunted house price growth over the next four years.
Dave Sayce, founder of Compare My Move, suggests this trend reflects broader global shifts during Republican administrations that hinder the UK economy and housing market performance:
Trade Tariffs Will Increase Mortgage Rates “One of Donald Trump’s main policies for his second term is the focus on increasing tariffs around the world, especially on China. President Trump has proposed that when re-elected, he will add additional levies on international goods of at least 10%, and up to 60% for goods made in China.
“The United States is the biggest trading partner of the UK meaning that if these tariffs come into effect, they could increase inflation in the UK over the next year, as the United States are the UK’s biggest trade partners in both imports and exports. The base mortgage rates and inflation are very closely related, with the Bank of England using the base rate to control inflation, meaning ordinary Brits will be paying more for their mortgage.”
Strength of the Dollar “Even if the UK avoids direct impacts from Trump’s tariffs, his focus on tax cuts and increased government spending—particularly in areas like defence, border security, and infrastructure—will likely play a central role in his presidency. These policies are expected to drive inflation in the U.S. over the next four years while strengthening the U.S. dollar.
“A stronger dollar means the UK has to pay more for imports priced in dollars, which account for a significant portion of global trade. In fact, over 35% of the UK’s current imports are paid in dollars. This currency imbalance drives up the cost of imported goods and services, which in turn adds to inflation in the UK.
“To counteract these inflationary pressures, the Bank of England would likely raise interest rates, which would result in higher mortgage rates. This creates a direct link between Trump’s policies and the cost of living and borrowing in the UK.”
UK Immigration “Trump’s platform has taken a strict stance on immigration, and it’s expected that immigration laws will become even tighter during his time in office. The United States remains a popular destination for British emigrants. In fact, according to Compare My Move statistics, the US was the second-most popular country for Brits moving abroad in 2024, with Spain taking the top spot. However, with a Republican-led government’s tougher approach to immigration, we are likely to see a decline in the number of Brits moving to the United States over the next four years. As a result, many may need to explore alternative destinations.”
