Heightened tax costs, tougher legislation, and now a global trade war. There doesn’t seem to be much upside in the property and investment worlds at the moment. But there is a silver lining here for expanding buyers and landlords – less competition.
According to Hamptons, the number of overseas buyers house hunting in the UK has hit a record low as a result of stamp duty costs, non-dom tax rule changes, and other issues. Domestic property investors may not have to compete against foreign buyers with deep pockets in the current market.
They may not even face much competition from UK-based buyers, especially those operating in London. Landlords are abandoning London’s prime rental scene, according to Knight Frank. The looming Renters’ Rights Bill, coupled with stricter EPC rules and rate uncertainty, is taking its toll.
Although, this panicked abandoning of the market, from both our shores and overseas, may be short-sighted. House prices in prime central London locations rose recently for the first time since 2023. Also, as landlords and property investors leave, it’s pushing rents up. Average rents in prime central London rose by 0.6% in Q1 2025. Again, the largest quarterly increase since November 2023.
What’s more, it may only be a matter of time until the wider financial landscape reminds investors of the property market’s benefits or potential. President Trump’s tariffs sent various capital markets into freefall in recent weeks. Global stocks plummeted, foreign exchange traders sought out safe havens wherever they could find them, and there’s been a notable sell-off in commodity prices. A 90-day pause in additional tariffs has calmed things down here, but there’s no telling if this will last in the long-term, and global investors may be shaken for a while.
Ironically though, Trump’s tariffs may actually rescue the UK housing market from its woes. Following the president’s announcement, the market priced in several Bank of England base rate cuts. Over the coming months, it may become cheaper to operate in the property market, and investors could be tempted to flock back in.
Time may be running out for property investors to take advantage of a relatively clear market. Fortunately, the specialist market can help them secure an opportunity quickly before their competition wises up to what may be on the way.
Evidently, outlooks can shift dramatically in a short space of time. We’ve seen this occur repeatedly with the 2022 mini-budget, Labour’s autumn budget, and more. What’s important is that brokers and borrowers react to these changes just as quickly. We may be on the road to recovery sooner than expected.