Donald Trump’s geopolitical upheavals are stalling the UK property market, with major developments collapsing and councils under pressure to drop affordable housing requirements. The US president’s policies have crushed post-pandemic recovery, particularly in the construction sector, which has become highly sensitive to international events since Covid-19 disrupted supply chains and sent raw material costs soaring.
Data from Glenigan shows the value of new projects fell by over a third in the three months to February, with major works worth more than £100m hit hardest. This follows Trump’s attack on Iran, which has heightened instability. Office building, civil engineering, and residential housing are all affected, dealing a blow to Chancellor Rachel Reeves’ growth plans.
The UK economy is heavily reliant on property, with financial services underpinned by property wealth and consumer spending tied to housing market confidence. However, consumer reluctance to buy homes, driven by affordability concerns and geopolitical risks, is exacerbating the slowdown. Glenigan’s economics director, Allan Wilen, warned that market volatility is causing daily price fluctuations, deepening the decline in construction activity and jeopardising hopes for a recovery in the second half of the year.
This presents a double dilemma for Reeves and local councils: lost tax revenue from stalled projects and an over-reliance on the private sector for housebuilding. Developers are using the disruption to push for concessions on public amenities and to target more affluent buyers, putting further pressure on affordable housing provision.
