"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"
- Dave Sayce - Compare My Move
The outcome of the U.S. election often has far-reaching effects across the globe, impacting nations and individuals alike. With Donald Trump’s win, even the costs British people face when moving house could be affected.
How US elections affect UK house prices
Below is a graph that shows the change in UK house prices during US presidential terms from 2005 onwards.
When a Democrat is in office as the US President, UK house prices historically rise 10% more than during a Republican presidency, various factors influence this difference. Here are some key reasons why a Democrat-led presidency impacts UK house prices differently compared to a Republican-led one.
Context
One key factor influencing the data is the timing of these US presidential terms. For example, the Obama administration coincided with the recovery from the 2008 financial crash, while the Biden administration aligned with the post-COVID housing market recovery we've seen over the past year or so. Therefore, these statistics must be viewed within the broader global context of their respective periods.
International Trading
Democrat-led administrations tend to promote international trade more and have more of a focus on global cooperation, whereas Republican-led administrations tend to have more protectionist, America-first policies. With the USA being the UK’s biggest trading partner, protectionist policies harm the UK economy, stunting the house price growth.
Strength of The Dollar
A Democrat-led administration often prioritizes higher government spending, which can weaken or steady the US dollar. A steady dollar reduces inflationary pressure on the pound, allowing the Bank of England to hold off on raising interest rates. This helps keep mortgage rates lower, supporting a healthier housing market and enabling house prices to rise.
How could four more years of Donald Trump influence UK housing markets?
Compare My Move founder and MD, Dave Sayce, has put together his predictions for the impact on the UK housing market in the next 4 years during Trump’s presidency.
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 are 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.”
