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Friday 4 April 2025
Friday 4 April 2025
Friday 4 April 2025
Friday 4 April 2025
As of April 2025, the United States has implemented a sweeping series of tariffs under former President Donald Trump’s revived economic strategy. While most commentary has focused on the implications for UK exporters and global trade, it’s worth asking: could these tariffs eventually affect the UK mortgage market?
Let’s take a measured look.
What’s Happening?
On 2 April 2025, the US announced a baseline 10% global tariff on non-US goods, alongside 25% tariffs on steel, aluminium, cars, and related parts. While countries like the EU, Japan, and South Korea will face even higher tariffs, the UK remains subject to the global base rate—for now.
For UK exporters, especially in manufacturing-heavy sectors such as automotive and metals, this is significant. The US is our largest goods export market, with cars forming a key part of that trade. A 25% tariff on UK cars entering the US is already prompting concern from British manufacturers, many of whom may see orders cancelled or margins squeezed as US buyers look for cheaper domestic alternatives.
But how does that link to mortgages?
The Indirect Connection: Jobs, Growth, and Lending Confidence
While tariffs themselves don’t directly alter interest rates or mortgage availability, they do feed into broader economic confidence, employment, and inflationary pressures—all of which can shape the UK housing market.
Pressure on UK Manufacturing Jobs
If UK carmakers and suppliers begin to lose contracts or downsize production due to US tariffs, we may see job losses in certain regions—especially in the Midlands and North East, where automotive and steel industries are concentrated. This could, in turn, dampen local housing demand and push lenders to tighten affordability checks.
Exchange Rate Volatility
Trade uncertainty often weakens the pound. A weaker GBP makes UK imports more expensive, potentially feeding inflation. If inflation rises, the Bank of England may need to maintain or increase interest rates, which would translate into higher mortgage repayments for variable-rate borrowers and more cautious lending.
Business Investment & Wage Growth
UK firms facing higher costs or uncertain US access may delay investment and hiring. Slower wage growth and reduced consumer confidence could lessen first-time buyer activity and reduce appetite for larger mortgages.
Could There Be a Silver Lining?
Ironically, the UK’s “less bad” position compared to the EU and other US trading partners could bring increased demand for British goods, particularly from US buyers looking to avoid higher tariffs. This may offset some negative impacts, and even create growth opportunities in niche sectors.
Moreover, if the pound drops significantly, UK property may look more attractive to foreign investors—particularly from the US and Asia—who often view British real estate as a stable store of value.
What Should Borrowers Do?
At Barrett Mortgages, we always advise keeping one eye on the bigger picture—especially when it comes to global events like this.
While Trump’s tariffs may not lead to immediate mortgage rate changes in the UK, they do increase uncertainty in the global economy. Borrowers should consider:
Reviewing fixed-rate options to protect against future interest rate hikes
Assessing affordability buffers if you're on a tracker or variable deal
Seeking advice early if your industry or income could be affected by knock-on economic changes
Looking Ahead
The next few months will reveal more about how these trade dynamics play out. The UK government is in negotiations with the US on a potential Free Trade Agreement, which could help ease some of the pressure. At the same time, we may see further retaliation from the EU and China, escalating tensions globally.
For now, our advice is simple: stay informed, stay calm, and don’t hesitate to reach out if you have questions about how this might affect your mortgage plans.
As of April 2025, the United States has implemented a sweeping series of tariffs under former President Donald Trump’s revived economic strategy. While most commentary has focused on the implications for UK exporters and global trade, it’s worth asking: could these tariffs eventually affect the UK mortgage market?
Let’s take a measured look.
What’s Happening?
On 2 April 2025, the US announced a baseline 10% global tariff on non-US goods, alongside 25% tariffs on steel, aluminium, cars, and related parts. While countries like the EU, Japan, and South Korea will face even higher tariffs, the UK remains subject to the global base rate—for now.
For UK exporters, especially in manufacturing-heavy sectors such as automotive and metals, this is significant. The US is our largest goods export market, with cars forming a key part of that trade. A 25% tariff on UK cars entering the US is already prompting concern from British manufacturers, many of whom may see orders cancelled or margins squeezed as US buyers look for cheaper domestic alternatives.
But how does that link to mortgages?
The Indirect Connection: Jobs, Growth, and Lending Confidence
While tariffs themselves don’t directly alter interest rates or mortgage availability, they do feed into broader economic confidence, employment, and inflationary pressures—all of which can shape the UK housing market.
Pressure on UK Manufacturing Jobs
If UK carmakers and suppliers begin to lose contracts or downsize production due to US tariffs, we may see job losses in certain regions—especially in the Midlands and North East, where automotive and steel industries are concentrated. This could, in turn, dampen local housing demand and push lenders to tighten affordability checks.
Exchange Rate Volatility
Trade uncertainty often weakens the pound. A weaker GBP makes UK imports more expensive, potentially feeding inflation. If inflation rises, the Bank of England may need to maintain or increase interest rates, which would translate into higher mortgage repayments for variable-rate borrowers and more cautious lending.
Business Investment & Wage Growth
UK firms facing higher costs or uncertain US access may delay investment and hiring. Slower wage growth and reduced consumer confidence could lessen first-time buyer activity and reduce appetite for larger mortgages.
Could There Be a Silver Lining?
Ironically, the UK’s “less bad” position compared to the EU and other US trading partners could bring increased demand for British goods, particularly from US buyers looking to avoid higher tariffs. This may offset some negative impacts, and even create growth opportunities in niche sectors.
Moreover, if the pound drops significantly, UK property may look more attractive to foreign investors—particularly from the US and Asia—who often view British real estate as a stable store of value.
What Should Borrowers Do?
At Barrett Mortgages, we always advise keeping one eye on the bigger picture—especially when it comes to global events like this.
While Trump’s tariffs may not lead to immediate mortgage rate changes in the UK, they do increase uncertainty in the global economy. Borrowers should consider:
Reviewing fixed-rate options to protect against future interest rate hikes
Assessing affordability buffers if you're on a tracker or variable deal
Seeking advice early if your industry or income could be affected by knock-on economic changes
Looking Ahead
The next few months will reveal more about how these trade dynamics play out. The UK government is in negotiations with the US on a potential Free Trade Agreement, which could help ease some of the pressure. At the same time, we may see further retaliation from the EU and China, escalating tensions globally.
For now, our advice is simple: stay informed, stay calm, and don’t hesitate to reach out if you have questions about how this might affect your mortgage plans.
As of April 2025, the United States has implemented a sweeping series of tariffs under former President Donald Trump’s revived economic strategy. While most commentary has focused on the implications for UK exporters and global trade, it’s worth asking: could these tariffs eventually affect the UK mortgage market?
Let’s take a measured look.
What’s Happening?
On 2 April 2025, the US announced a baseline 10% global tariff on non-US goods, alongside 25% tariffs on steel, aluminium, cars, and related parts. While countries like the EU, Japan, and South Korea will face even higher tariffs, the UK remains subject to the global base rate—for now.
For UK exporters, especially in manufacturing-heavy sectors such as automotive and metals, this is significant. The US is our largest goods export market, with cars forming a key part of that trade. A 25% tariff on UK cars entering the US is already prompting concern from British manufacturers, many of whom may see orders cancelled or margins squeezed as US buyers look for cheaper domestic alternatives.
But how does that link to mortgages?
The Indirect Connection: Jobs, Growth, and Lending Confidence
While tariffs themselves don’t directly alter interest rates or mortgage availability, they do feed into broader economic confidence, employment, and inflationary pressures—all of which can shape the UK housing market.
Pressure on UK Manufacturing Jobs
If UK carmakers and suppliers begin to lose contracts or downsize production due to US tariffs, we may see job losses in certain regions—especially in the Midlands and North East, where automotive and steel industries are concentrated. This could, in turn, dampen local housing demand and push lenders to tighten affordability checks.
Exchange Rate Volatility
Trade uncertainty often weakens the pound. A weaker GBP makes UK imports more expensive, potentially feeding inflation. If inflation rises, the Bank of England may need to maintain or increase interest rates, which would translate into higher mortgage repayments for variable-rate borrowers and more cautious lending.
Business Investment & Wage Growth
UK firms facing higher costs or uncertain US access may delay investment and hiring. Slower wage growth and reduced consumer confidence could lessen first-time buyer activity and reduce appetite for larger mortgages.
Could There Be a Silver Lining?
Ironically, the UK’s “less bad” position compared to the EU and other US trading partners could bring increased demand for British goods, particularly from US buyers looking to avoid higher tariffs. This may offset some negative impacts, and even create growth opportunities in niche sectors.
Moreover, if the pound drops significantly, UK property may look more attractive to foreign investors—particularly from the US and Asia—who often view British real estate as a stable store of value.
What Should Borrowers Do?
At Barrett Mortgages, we always advise keeping one eye on the bigger picture—especially when it comes to global events like this.
While Trump’s tariffs may not lead to immediate mortgage rate changes in the UK, they do increase uncertainty in the global economy. Borrowers should consider:
Reviewing fixed-rate options to protect against future interest rate hikes
Assessing affordability buffers if you're on a tracker or variable deal
Seeking advice early if your industry or income could be affected by knock-on economic changes
Looking Ahead
The next few months will reveal more about how these trade dynamics play out. The UK government is in negotiations with the US on a potential Free Trade Agreement, which could help ease some of the pressure. At the same time, we may see further retaliation from the EU and China, escalating tensions globally.
For now, our advice is simple: stay informed, stay calm, and don’t hesitate to reach out if you have questions about how this might affect your mortgage plans.
As of April 2025, the United States has implemented a sweeping series of tariffs under former President Donald Trump’s revived economic strategy. While most commentary has focused on the implications for UK exporters and global trade, it’s worth asking: could these tariffs eventually affect the UK mortgage market?
Let’s take a measured look.
What’s Happening?
On 2 April 2025, the US announced a baseline 10% global tariff on non-US goods, alongside 25% tariffs on steel, aluminium, cars, and related parts. While countries like the EU, Japan, and South Korea will face even higher tariffs, the UK remains subject to the global base rate—for now.
For UK exporters, especially in manufacturing-heavy sectors such as automotive and metals, this is significant. The US is our largest goods export market, with cars forming a key part of that trade. A 25% tariff on UK cars entering the US is already prompting concern from British manufacturers, many of whom may see orders cancelled or margins squeezed as US buyers look for cheaper domestic alternatives.
But how does that link to mortgages?
The Indirect Connection: Jobs, Growth, and Lending Confidence
While tariffs themselves don’t directly alter interest rates or mortgage availability, they do feed into broader economic confidence, employment, and inflationary pressures—all of which can shape the UK housing market.
Pressure on UK Manufacturing Jobs
If UK carmakers and suppliers begin to lose contracts or downsize production due to US tariffs, we may see job losses in certain regions—especially in the Midlands and North East, where automotive and steel industries are concentrated. This could, in turn, dampen local housing demand and push lenders to tighten affordability checks.
Exchange Rate Volatility
Trade uncertainty often weakens the pound. A weaker GBP makes UK imports more expensive, potentially feeding inflation. If inflation rises, the Bank of England may need to maintain or increase interest rates, which would translate into higher mortgage repayments for variable-rate borrowers and more cautious lending.
Business Investment & Wage Growth
UK firms facing higher costs or uncertain US access may delay investment and hiring. Slower wage growth and reduced consumer confidence could lessen first-time buyer activity and reduce appetite for larger mortgages.
Could There Be a Silver Lining?
Ironically, the UK’s “less bad” position compared to the EU and other US trading partners could bring increased demand for British goods, particularly from US buyers looking to avoid higher tariffs. This may offset some negative impacts, and even create growth opportunities in niche sectors.
Moreover, if the pound drops significantly, UK property may look more attractive to foreign investors—particularly from the US and Asia—who often view British real estate as a stable store of value.
What Should Borrowers Do?
At Barrett Mortgages, we always advise keeping one eye on the bigger picture—especially when it comes to global events like this.
While Trump’s tariffs may not lead to immediate mortgage rate changes in the UK, they do increase uncertainty in the global economy. Borrowers should consider:
Reviewing fixed-rate options to protect against future interest rate hikes
Assessing affordability buffers if you're on a tracker or variable deal
Seeking advice early if your industry or income could be affected by knock-on economic changes
Looking Ahead
The next few months will reveal more about how these trade dynamics play out. The UK government is in negotiations with the US on a potential Free Trade Agreement, which could help ease some of the pressure. At the same time, we may see further retaliation from the EU and China, escalating tensions globally.
For now, our advice is simple: stay informed, stay calm, and don’t hesitate to reach out if you have questions about how this might affect your mortgage plans.
