Donald Trump’s second term as U.S. President introduced significant shifts in global economic dynamics, particularly influencing energy markets and real estate sectors across the UK and EU. His administration’s policies, characterised by many as aggressive trade measures, and a strong emphasis on fossil fuel production, had multifaceted effects, but where do the opportunities lie in somewhat uncertain times?
Key Policy Factors and Energy Prices.
President Trump’s commitment to bolstering U.S. oil and gas production led to increased global supply, exerting downward pressure on energy prices. This surge in supply, while beneficial in reducing immediate energy costs for European consumers, introduced volatility due to fluctuating trade relations and market uncertainties.
The U.S. administration’s placement of tariffs, particularly on European imports, threatened to dampen economic growth within the EU. These measures have not only strained trade relations but also contributed to economic uncertainties that affected energy demand and pricing structures. Most recently, there has been chatter of concern around the knock-on effects of tariff pricing in other areas effecting the gas supply chain, and therefore the competitiveness of gas prices. Concerns which are coming to a head as the U.S. pushes for increased shipping of American liquefied natural gas (LNG) to Europe. The fallout? Some EU officials are now proposing the potential relaxation of emission-based rules on methane imported from the U.S. in attempt to make it easier to cut a deal, which may feel like a step towards decreased trading tension, but would no doubt be a step back for net-zero goals.
Trump’s withdrawal from the Paris Agreement in 2025 signalled a retreat from global climate commitments, prompting the EU to reassess its energy strategies. In response, the EU accelerated plans to reduce reliance on fossil fuels, aiming to phase out Russian energy imports by 2027 and exploring clean energy. Even in the move towards clean energy there is room to be cautious, as such a large proportion of low carbon and green technology’s is powered by China. The overwhelming theme seems to be one of energy security for Europe, not of cutting the U.S. out, despite a few difficulties renegotiating around new tariffs.
The U.S. pushing forward it’s production and sale of fossil fuels is symptomatic of a wider shift in the administration though, one of disdain for climate conscious trade or sustainable action in any form. The EU and UK could see this as a time for new strategies around Cleantech and energy diversification, as the world shifts to create a different perspective it may just be a chance to spot new opportunities.
Where the Opportunities Lie.
There is no denying there have been headwinds in the wider market as a result of these policies; the European real estate market experienced disruptions linked to broader economic uncertainties stemming from U.S. trade policies. And in early 2025, property sales in Europe declined by 11% year-on-year, reflecting investor caution amid geopolitical tensions, while property deal volumes in Britain fell 26% to 10.6 billion euros (Reuters). But there’s plenty to be positive about across the UK Real Estate and Investment landscape, and an upward tick in sustainable investments:
- 1. UK Housing Market Dynamics
Despite global economic changes, the UK housing market demonstrated resilience. Major house builders reported steady sales and price growth, attributing this stability to factors like falling mortgage rates and sustained buyer demand. However, concerns lingered regarding slowed economic growth in the UK, affecting job creation and wage growth. - 2. Potential Opportunities for UK Investors
Despite the uncertainties, opportunities exist in regional markets like Birmingham, Nottingham, and Liverpool, which have shown strong growth and offer better value for investors. Sectors such as student housing and build-to-rent properties present attractive options due to steady demand. The growing gap between rising house prices and wage growth underscores the potential of investing in affordable housing.
A New Investment Flow for Sustainability.
“When Trump pulled the US out of the Paris Agreement, few predicted the long-term impact. Fast forward, and the UK is now the go-to destination for institutional green capital that can’t find a home in the US.”Joey Aoun, Net Zero & Sustainability Lead at Savills Investment Management
Trump’s environmental policy shifts, notably the exit from the Paris Agreement, redirected U.S. ESG investments towards more climate-committed markets. The UK, with its robust net-zero targets and supportive regulatory environment, emerged as a prime destination for green capital, anticipating an influx of over $4.2 billion into sustainable real estate projects by 2026. The importance of this? America was the largest overseas investor in commercial property in 2024, spending £13.6bn (more than double the amount spent in 2023!), so commercial property is one to keep an eye on.
Location-wise, London is positioning itself as a key destination for more investment in 2025, and the North-West is looking particularly attractive for BTR developments, of which the U.S. has already played a huge role in driving forward. Multifamily accounted for 12% of all oversees investment into the UK between 2021 and 2024:
“It may not be surprising to see that the US tops the list this time for overseas investment given that US investors have been instrumental in the growth of the Build-to-Rent sector, providing more than a hundred thousand modern, professionally managed homes”Melanie Leech, CEO, British Property Federation
President Trump’s second term introduced a complex array of policies that were felt through global energy and real estate markets. While increased U.S. fossil fuel production temporarily alleviated energy costs in Europe, the associated trade tensions and policy uncertainties introduced market volatility. In the real estate sector, despite initial disruptions, regions like the UK showcased adaptability, leveraging shifts in global investment patterns to bolster sustainable development.
Overall, this period will illustrate the complex relationships between international policies and regional economic landscapes, and as with all challenges and changes, presenting a new set of opportunities and perspectives for the real estate industry to take. There is positivity on the horizon for those willing to adopt a new direction.