So UK property investment you're thinking what is Trump winning in the US have to do with me over here? It's a great question a lot of people are asking. But we're going to deep dive into exactly that, how those policies might ripple out ripple effect and affect the UK economy, and specifically what it means for property investors like you. For sure, we're going to break it down into three time frames, right? Short term, 1 to 2 years, okay. Medium term about 4 to 5 years out. And then the long view all the way out to ten years. Buckle up. Buckle up. Exactly. It's gonna be a wild ride. It is fascinating to see how those seemingly distant events, yeah, can have such a lasting impact. Especially, you know, especially we're going to factor in UK politics. Yeah. Oh and Brexit of course Brexit always a curveball. Always adding another layer to this for sure. So immediate reactions okay. Short term impacts the next year or two. Right. One thing that jumped out from the research is market volatility following us elections. Oh absolutely. Yeah. Historically yeah there's always a reaction in the markets right when a new US president takes office, especially someone like Trump, right? Someone who, yeah, shakes things up, shakes things up a little bit. So investors get a little, you know, skittish a flight to safeties, what they call it, are they pull back from assets that are perceived as riskier like stocks. Right. And they move towards things like gold and government bonds okay. Because those are seen as safer safe havens. Safe havens. Yeah. Exactly. During those uncertain times. So that means we could see some fluctuations in the FTSE 100 and FTSE 250 potentially. Yeah. Those are the UK's main stock indexes right. Yeah. In case you needed a refresher. Yep. And potentially even some swings in the value of the pound. Absolutely. So we're talking stocks. We're talking currencies.
But what about real estate. Right. What about bricks and mortar. Yeah. How does property react in these situations. Yeah. Well this is where it gets interesting right. Because real estate tends to be more resilient during those periods. Really. Oh yeah. It's seen as a tangible asset something concrete okay. And you know. Property markets. They just tend to move a bit slower right, than the stock market, you know, so it's not as knee jerk. So this volatility yeah. Could it actually be an opportunity. Oh it could be a huge opportunity if you're savvy if you're savvy right. If you've got a solid long term strategy. Uhhuh. You know you're not afraid of little short term fluctuation. Yeah. You could find yourself in a really good position to buy. So everyone else is freaking out, panicking, panicking. Maybe there's a chance to get a deal. Exactly. Think of it like this. Yeah. If those stock market swings right, spooks and property sellers, they might be more willing to accept a lower price. Yes. To get out just to get out a quick sale. Yeah. You know market volatility. Yeah. What else should we be watching out for in this short term time frame. Yeah. Trade and economic growth. Oh of course always key factors to consider big ones and Trump's America First policies you know yeah those are the potential to really disrupt global trade right. Which could be you know especially significant for the UK. Oh huge. Especially post-Brexit. post-Brexit. Yeah. Another layer. Right. So the UK was already figuring out a whole new trade landscape after leaving the EU, right? What kind of impact are we talking about? Okay. So if those protectionist policies. Right, um, lead to new trade barriers, you know, that could slow down UK exports. Okay. Which then has a ripple effect on GDP growth. Right. The whole country's economic growth. It's all connected. It's all connected. What about okay. So we've got this potential slowdown. Yeah. But didn't Labour just announce a new budget. They did. Yeah. Could that help offset some of that turbulence. So Labour's budget it signalled a shift towards more what we call expansive fiscal policies I think increased government spending on things like infrastructure. Yeah. Social programs. Right. And that type of spending can really stimulate economic activity okay. And potentially kind of. Cushion the impact of a slowdown. So the balancing act right. It is both the economy on the one hand potentially increased government debt on the other. And how does that then play into interest rates are the big question. The big one. Because if the government borrows more money, right, it can drive up interest rates, okay. And rising interest rates make it more expensive for people to get mortgages right, which could then cool down a certain part, certain segments of the property market. Okay, so we've got market jitters, right? We've got potential trade disruptions. Yeah, we've got a new budget that could, who knows, help or complicate things. Absolutely. Anything else in this in this short time frame. Short term. Yeah. Well, it's worth paying attention to the specific sectors that might be most vulnerable to those trade disruptions. Okay. Right.
For example, if Trump's policies lead to changes in manufacturing, agriculture. Oh boy. You know, those changes could have a domino effect on related industries in the UK. Right. Which then could affect property values. So it's not just the big picture. It's not just the big picture. It's the nuances. It's the nuances. Exactly how those changes play out. Exactly on a regional level. Regional level. Yeah. Yeah. Okay. And it's not just reacting to what's already happened, what's coming next, what's coming next, what potential government interventions should investors be watching for? Right. So the UK government might actually. Implement measures to. They might try these highlights. The economy. Yeah. Support industries. Yeah. Impacted by those disruptions. And those interventions could range from tax breaks to direct financial assistance. So for an investor yeah those could be opportunities huge opportunities if you're paying attention okay. So we've got market jitters trade disruptions government policies. Yeah this is a lot. It is. We've got to watch it all.
But it gets even more interesting okay. When we start talking about the medium term okay. The medium term. So that 4 to 5 year horizon 4 to 5 year horizon. Exactly. Right. We're talking about the potential for a domino effect okay. To really play out. Yeah. Let's see how these like short term tremors could really ripple out over the next few years. Okay. One of the biggest things to watch, yeah, is how those policies, Trump's policies could influence interest rates. Okay. Interest rates not just in the US but globally. Yeah I know interest rates are a big deal. They are for investors, but can we just remind ourselves why they matter so much in the property market? Think of interest rates like the volume knob on the property market. Okay. When rates are low, it's like turning up the volume okay. Borrowing money is cheaper, right? People have more buying power and that can really drive up property prices. Right. But then when rates go up, it's like turning the volume down. Mortgages get more expensive, right? Buyers have less purchasing power. Yeah. So that can put downward pressure on prices. So it's all about affordability affordability higher interest rates. Yep. Higher monthly payments. Uhhuh. So that could price some buyers right out of the market. And this is where that domino effect comes in okay. Domino effect. Here it is.
So if the US economy let's say it heats up under these policy under those policies. Right. The Federal Reserve that's the US central bank. Right. They might raise interest rates to try to keep inflation under control. Okay. So the US raises rates right? What does that have to do with the UK. Well see global markets they're all interconnected right. It's all one big system. It is. So if US interest rates go up yeah it can put pressure on other countries including the UK to raise their rates as well. Okay. Why is that. Because investors are right. They're always looking for the best return the best on their money. Right. So if they can get higher interest rates over in the US, they might pull their money out of the UK. Oh I see which would weaken the pound. Right. And then make it even harder for the UK to keep inflation under control. So the Bank of England, which is the UK's central bank, might have to raise rates. They might just to keep up with the US to stay competitive. Right, right. Keep those investors happy, those investors happy. And this brings us back to property. It always comes back to property. So rising interest rates yeah in the UK higher mortgage costs that cools the market down. It can cool it down especially at the higher. Especially higher price segments and the buy to let market right away. That's where investors buy properties to rent them out, right? Right. So if your mortgage costs go up. Uhhuh. Those rental yields, the return on your investment might not look so attractive anymore. Yeah, that's a good point. But then Labor's budget comes back into play. Right. Labor's budget remember. Yeah. Social and affordable housing. Yeah that was a big part of it. If they actually push forward with those plans right. It could create opportunities for investors who are interested in a different type of market. Interesting. So even within the property market itself, yeah there's different things going on. Always different dynamic. Okay. Let's say let's play this out. Yeah. Instead of a boom right. Trump's policies lead to a global slowdown a global slowdown okay. What happens to those big spending plans in Labor's budget. That's the million dollar question isn't it. Yeah a global slowdown would really put a strain. Oh yeah On any government's budget, of course, especially one that's already planning to increase spending. Right. So it could mean some tough choices. Yeah. You know which programs to prioritize, which ones to cut back on. Tough decisions. Tough decisions. So for property investors. Yeah.
What does that actually mean. What should we be watching for. Keep an eye on any potential tax adjustments related to property. Property taxes okay. Government's facing a budget squeeze, right? They often look for ways to increase revenue and property taxes. They can be a tempting target okay. So things like capital gains tax. Yeah the tax you pay when you sell a property for profit for profit rate or stamp duty, stamp duty when you buy a property, when you buy those could be on the chopping block. They could. So changes to those taxes that could really impact it. Could an investment strategy. Absolutely. Okay. So stay informed on the tax front. Stay informed. Another layer to consider. Yeah. Those global investment flows. Oh right. Remember we talked about shifts in U.S. policy. Economic slowdowns. Yeah. All those things can influence where investors around the world choose to put their money right. It's like a big game of financial musical chairs. Exactly. So less investment coming into the UK. Is that what we're talking about? It's a possibility, yeah. If the US becomes less attractive to foreign investors, to foreign investors, or if investors think the UK is just too risky in a slowing global economy, slowing global economy, yeah, we could see a decrease. We could see an investment in UK property potentially. But wait, couldn't that also create some opportunities. Oh now you're thinking like a true investor okay. Right. So if those big institutional investors they pull back doesn't that create some space. Yeah. For smaller investors, smaller investors maybe step in and scoop up. Scoop up some bargains. Yeah. Okay, so it's all about perspective, right? Yeah. When the market dynamics shift, it inevitably creates challenges. Yeah. But it also creates opportunity opportunities. It's two sides. It is of the same coin. Yeah. Exactly. Who adapt. Those who adapt and see those opportunities. They're going to be the ones who come out ahead okay. So it's not doom and gloom. No, not at all. It's more like a reshuffling. A reshuffling. Yeah. A new set of winners and losers. Exactly. Okay.
So the medium term outlook UK property market. It's all about navigating that uncertainty being adaptable. Yeah. Understanding understanding how those global trends yeah really translate into local impact local impacts. Got it got it. Adaptability is key. It is okay. Let's take a deep breath. All right. Jump into the long term the long term the ten year horizon ten years out I'm both excited and a little terrified to see I know it's a lot what happens. It is thinking long term. This is where we can really stretch our imagination, because it's not just about predicting the future. No, it's about understanding the potential scenarios exactly and positioning ourselves to thrive. Thrive. Yeah. No matter what happens, no matter what. Okay, so so let's imagine a world ten years from now, ten years, where those protectionist policies that we talked about have actually led to a more fragmented global economy. Okay. I'm picturing yeah, more trade barriers, less international cooperation, maybe even some regional blocs forming. Yeah. Yeah. A shift away from globalization. And that's a real possibility. Yeah. As we know it. But remember, even in a more fragmented world, right. Trade and investment don't disappear. They adapt. They adapt. Okay. So the UK might have to diversify. Diversify. Yeah. Its economic relationships. Exactly. What does that mean for property investors. Well should we be looking beyond London. Beyond London. Yeah. Those traditional hot spots. It's a smart question, okay, because diversifying geographically becomes even more important in a world where the economic landscape is shifting. Okay, so secondary cities, secondary cities, ones with strong local economies, right. Potential for growth that might not be as reliant on global trade flows. Okay. So looking beyond beyond the usual suspects. The usual suspects. Yeah okay. Different types of properties. Yes. Are we still talking about traditional violet. Right, right. Or is this a time to consider to consider alternative alternatives? Yeah. This is where understanding those structural shifts in the economy is crucial. Because if certain industries are declining, right, while others are emerging. Yeah, it's going to change the demand for different types of real estate. Exactly. Student accommodation for example. Okay.
Student accommodation could see steady growth. Okay. If the UK attracts more international students because of these new trade relationship, because of those new relationships. Right. Interesting. Yeah. What about okay. The aging population. Yeah. Yes. And the labor was focusing on that. They were in their budget. Absolutely. More senior housing. Senior housing. Yeah. Retirement communities. That's a trend. That's a trend that's only going to accelerate. That's not going away no matter what happens politically. Right. And it's a huge opportunity for investors who are thinking long term huge opportunity okay. Yeah. So even in a more fragmented global economy yeah. Pockets of opportunity. There are if you're looking at those demographic shifts, are those shifts exactly okay. This is all great advice for someone building a portfolio. Yeah. But what about the everyday homeowner right. Should they be worried about these long term trends. It's always wise to be aware of the broader economic forces. Yeah. But remember property is a long term investment long term. And those who bought their homes years ago. Right. They've likely seen significant can appreciation even with the ups and downs, even with all the craziness, all the craziness. Yeah, it's about the long game. Long game. Exactly. Those short term fluctuations. But they become less significant when you're looking at a ten year horizon. Exactly. Okay, let's shift gears a bit. Okay.
Talk about technology. Technology. The US has such a huge influence on that. It does. And labor trends, labor trends and these policies focused on deregulation, domestic innovation could really accelerate those shifts. The UK would have to adapt. The UK's got to adapt potentially new real estate demands, made demands related to tech hubs, tech hubs, flexible workspaces, exactly the rise of remote work. Remote work. Yeah, the gig economy, gig economy. Everyone's talking about it. All those tech companies needing office space, right? Even if it's not in a traditional city centre. Right. And that actually ties back into Labor's budget. It does their emphasis on green energy. Green energy. Yeah. Sustainable infrastructure. So we could see more opportunities for environmentally conscious developments, right? Buildings designed for energy efficiency, sustainability. And that appeals to everybody, investors and tenants. Yeah, but it's not just about appealing to a certain demographic. Sustainable building practices are becoming essential from a regulatory standpoint. Yeah. Regulatory investment standpoint okay. Think about it. Yeah a building with a lower carbon footprint right is going to be more valuable in the long run. Okay. So we've got technology right. Labor trends sustainability sustainability all intertwined. What about interest rates are interest rates. We talked about the short and medium term. Yeah. What's the long term trajectory. So after that initial volatility we talked about we would expect rates to stabilize eventually okay. But the key is they might settle at a higher average than what we've seen in the current cycle. In the current cycle because of those global inflationary trends. Exactly.
Inflation is a. Complex beast. It is an global economic policies, including those from the US. Right, are going to play a role in shaping that long term trajectory. So even if things calm down, yeah, we shouldn't expect rates to go back to to those historical lows, those historical lows we've seen recently. Yeah, yeah. What does that mean for someone who's planning to buy in the next few years? In the next few years? Yeah. It means understanding the implications. Yeah. Of fixed versus variable rate mortgages okay. Fixed versus variable rate becomes crucial okay. Locking in a lower fixed rate early on okay. Anticipating those increases. Yeah. Could be beneficial. Could be really beneficial. But of course right. There's always the chance rates could go down right. In which case a variable rate might be the better option. Right. It's all about weighing those options okay. Considering your own risk tolerance getting some expert advice excellent advice. Always good to have. Yeah it's a long term game. Is that small difference in interest rates today? Yeah. Could have a big impact down the line a huge impact over the life of a let's say 25 year mortgage 25 years. Yeah. Yeah absolutely. All right. We covered a lot. We did global economic shifts to technology. Yeah. Those all important interest rates the big ones. Any final thoughts on how to navigate how to navigate this long term landscape. Yeah because it can feel overwhelming it can try to make sense of it all, I understand. Yeah, the key takeaway here is that the world is changing. It is. UK property market is evolving right along with it. Right. Staying informed, being adaptable, diversifying your approach, diversifying those are essential for long term success. I love that it's not about predicting the future. No, it's about being prepared for the different possibilities and having that flexibility to adjust. Adjust your strategy as needed. Exactly. And that's where informed decision making comes in. Absolutely. Understanding the potential impacts of these global trends, right. Aligning your investments with those shifts, you can position yourself to not just weather the storm. Weather the storm, I like that, but to actually thrive in this evolving landscape. Fantastic advice. Thanks. Well, folks, there you have it. Yeah, our deep dive into the UK property market in the wake of a Trump victory. We covered it all. We did short term volatility to those fascinating long term trends, the whole spectrum. Hopefully you're feeling a bit more equipped to navigate this exciting, albeit complex landscape. It is a complex one. It is remembered. Knowledge is power. Absolute.
Staying curious is the key. It is to unlocking those hidden opportunities, right? So keep learning, keep exploring. And as always, happy investing. Happy investing.
Comments