Broker believes investors could thrive
While Donald Trump delivered his tariffs announcement to the world with all the flair of a TV game show host, there were few around the globe – it seems – who found him entertaining. The repercussions of his momentous decision are already being felt and the American President’s decision has undoubtedly spooked many investors internationally. US markets dropped sharply again on opening yesterday, and Europe’s most significant stock markets, including London’s FTSE 100, all closed at over 4% down.
Yet as worrying as this may be for the wider financial world, could Trump’s tariffs create new opportunities in the property market? Broker Luther Yeates (pictured) certainly thinks so. Yeates, who is head of mortgages at Orton Financial, believes that if the pandemic taught us anything, it is that property remains a resilient asset class during periods of uncertainty. Despite predictions, UK property prices surged to record highs after an initial period of stagnation, he points out, and house prices continued to soar into 2023, outpacing growth in previous years. If inflation remains elevated due to tariffs, we could witness something similar in the coming months, he suggests.
“Whilst tariffs apply to goods, they don’t apply to services,” Yeates told Mortgage Introducer. “The market is relatively shielded, which means there is less volatility and more certainty. House prices should be seen like any other form of investment. There may be short-term fluctuations, but you aren’t expected to be buying and selling your home on a regular basis. The UK is still in demand as a place to live and we have a growing population. The need for housing will continue indefinitely. This, combined with great access to financial markets, will only fuel growth in house prices.”
Furthermore, Yeates isn’t discouraged that UK house prices fell by 0.5% in March, equating to a monthly decrease of £1,575, according to new figures from Halifax, yesterday. Despite the drop, the annual rate of house price growth remained unchanged at 2.8%. The average home now carries a price tag of £296,699, the mortgage lender reported. “There was going to be some short-term price adjustments due to the change in Stamp Duty,” he reasoned. “This also came at a time where a number of changes were due to come in, such as the employer National Insurance increase, and expectations the Bank of England would further cut the base rate. We are seeing less demand on the buy-side, but we expect this to improve.” Property investors who position themselves well now could see strong returns in the coming years, in Yeates’ view. With more would-be buyers staying in the rental market, demand for rental properties will likely climb even further, he thinks.
Read more: Mortgage market shows signs of warming up
Brokers could boost business advising on overseas property purchases
Yeates established his successful and growing whole of market business, based in Bristol, in 2022. Orton Financial provides specialist financial advice for land and property in the UK, with clients including expats and foreign nationals – and a focus on business further afield could prove fruitful now, he observes.
Those brokers seeking to navigate a somewhat choppy economy might consider supporting clients who are purchasing property abroad. “It is a great time for anyone who is looking to purchase overseas where dollars are required,” he said. “The pound is strong and if you were buying for £1m, you just received a £62,000 discount - relative to the exchange rate in January.” He added: “The overseas market is a great way to prepare yourself for the future. You can then work with clients in the growth economies without being so reliant on the economic performance of the UK. There are different rules around insurance and how you provide advice. So it is important to speak to someone in the industry before making this change.”
