How are US president Donald Trump’s infamous tariffs impacting the UK mortgage market?

Here, we look at the positive and negative influences on the UK property sector and how we brokers can best support our landlord clients.

Trump’s recent imposition of broad tariffs — dubbed ‘Liberation Day’ — has introduced a complex set of dynamics for UK landlords. While these tariffs mainly target US trade partners, their ripple effects are being felt globally, including in the UK property market.

For better or worse, helping our clients understand the implications of Trump’s tariffs is now essential. Here’s what we’re seeing.

Falling mortgage rates

Trump’s volatility has caused potential investors to move their focus away from the US and towards the UK. This has helped ease down swap rates significantly below the 4% mark.

We are best placed to guide our clients through this

Furthermore, in light of the economic uncertainty spurred by the tariffs, the Bank of England is anticipated to lower the Bank Base Rate (BBR) more aggressively than previously expected. Projections suggest four rate cuts this year, with the second perhaps as soon as May.

This shift has already influenced mortgage lenders, which have begun pricing in further BBR reductions. In recent weeks, brokers have seen fixed mortgage rates fall as swap rates decline by approximately 0.2%.

For landlords, particularly those with variable-rate mortgages or those seeking new buy-to-let deals, these reductions could significantly lower mortgage costs and improve investment returns.

The impact on global trade could suppress UK economic growth

Many landlords have held off making finance decisions in anticipation of more competitive rates, making this change an unexpected success for brokers and investors alike.

Regional disparities

Despite the broader positive impact of lower mortgage rates, the tariff implications are not entirely beneficial for UK property investors.

London’s property market, particularly its high-end segments, may be more susceptible to the tariffs’ adverse effects. The capital’s reliance on foreign investment makes it vulnerable to global economic shifts.

The tariffs have introduced a complex set of dynamics for UK landlords

Recent data indicates a mere 0.5% increase in asking prices in April. London is the only UK region to experience a decline in buyer enquiries compared to the previous year. This suggests that, while some areas may benefit from the changing economic landscape, London’s market could face headwinds.​

Broader economic implications

Furthermore, the tariffs’ impact on global trade could suppress UK economic growth, potentially leading to:​

• Reduced consumer confidence, affecting tenants’ ability to afford rent increases, with some sadly experiencing job losses.
• A slowdown in housing demand, particularly in areas heavily reliant on exports or foreign investment.

Landlords should be cognisant of these factors because they may influence rental income stability and property valuations.​

In recent weeks, brokers have seen fixed mortgage rates fall as swap rates decline by approximately 0.2%

What’s more, some of Trump’s tariffs are likely to be inflationary and could push up UK inflation by 0.7% more than predicted for this year. If this transpires, the likelihood of significant BBR reductions will decrease, leaving landlords waiting much longer for lower mortgage deals.

Optimistic house price outlook

Despite these potential challenges, lower mortgage rates will propel the UK housing market and provide landlords with a much more positive landscape in which to look for property investment opportunities.

As mortgage rates ease, current predictions suggest UK rents will rise by as much as 4% by the end of this year, driving up rental yields. More buyers will be able to afford homes, and thus a possible uptick in house prices means we could enter a ‘perfect storm’ with favourable conditions for landlords to invest.

London’s property market, particularly its high-end segments, may be more susceptible to the tariffs’ adverse effects

Although Trump’s tariffs have caused uncertainty, they have simultaneously unlocked new opportunities for property investors, with falling mortgage rates and a positive outlook for the housing market. Our challenge now lies in guiding our clients through the turbulent waters and finding new, strategic property finance opportunities.

As brokers, we are best placed to guide our clients through this unknown territory and the shifting economic market.

In uncertain times like these, the right support for landlords is invaluable. Otherwise, how will we become the brokers they trust most?

This article featured in the May 2025 edition of Mortgage Strategy.

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