There is really only one topic of debate and forensic analysis at the moment and that’s the ascendency of Donald Trump to the US Presidency.
Just writing those words would have been unthinkable six to 12 months ago but they are now fact and the whole world has woken up to the fact that a ‘Republican’ – although perhaps just in name rather than deed – businessman who has held no previous public office and has espoused some frankly incredible and disgusting views during his campaign, will now be the most powerful person in the world.
You can fully understand why there is a sense of trepidation, dare I say it, foreboding about what comes with a Trump Presidency – there appears to be a hope that Trump’s electioneering rhetoric will not translate into policy along the same lines, and of course there are structures of Government in place which should ensure some of his more ludicrous ‘policies’ do not make it into law.
Ironically, the strengthened position of the Republicans within both the Senate and House of Representatives appears to be good news for those Democrat voters who are so fearful of what Trump will actually do.
Trump effectively ran for President outside the support of his own party and there will be many unwilling to give him everything he wishes just because he has won the race.
Conversely, he may believe that his victory gives him a full mandate to pursue any policies he wishes and he may decide it’s worth being at loggerheads with his own party in order to get what he wants.
While the longer-term effects of President Trump are much more difficult to discern, we can at least look with more certainty at the short-term. Even in the few short hours since the result was known – I write this on November 9 – the initially volatility in the markets seems to have calmed down.
The FTSE 100 is up in the UK, and across the pond, the steep initial drop seems to have corrected itself – in that sense this appears (at the moment) not to have had such a negative initial impact on market sentiment as Brexit.
The markets were clearly not anticipating a Trump victory but appear to be willing to hold fire in terms of their own opinion. Indeed, perhaps Trump’s conciliatory victory speech had a major impact – it was certainly not the Trump we witnessed during the campaign with words of respect for Hillary Clinton and the announcement that he would be President for all American citizens.
Again, let’s not forget that Trump has supported Democrat Presidential candidates in the past, and it has seemed clear for some time that he is not a natural bedfellow with many Republicans.
The dollar has weakened and this may present the UK with a short-term positive effect; over the next few months if it reaches more of a comparative level with the pound, making our imports cheaper, inflation may not rise as strongly as predicted, especially when you consider that 40-45% of our imports are controlled by the US Dollar.
Plus, you might justifiably add in arguments regarding trade agreements – as many have outlined, a UK, post-Brexit at the ‘back of the queue’ when it comes to trade deals seems far less likely under Trump, who has suggested he would much prefer to hit foreign markets such as China.
We must not forget that the US is the biggest export market for UK businesses and therefore any positive news on this front would be most welcome to our country’s economic performance.
In terms of our own housing market, again it’s too early to say how it might be impacted. The suggestion has already been made that prime London property might benefit as US investors look for worldwide ‘safe havens’ but this is all conjecture.
Certainly, there is an added level of uncertainty brought into the mix in terms of what Trump will do, and coupled with our own Brexit negotiations, it may well be that people have been provided with more reason not to move or purchase property.
My own belief is that we will see little noticeable impact and that the market will continue to move along a similar direction for some time to come.
Overall, it seems clear that the UK housing market – apart from maybe some influence on those super-prime London enclaves – will be shaped by events and policies born in this country, rather than abroad.
However, the whole nature of world politics and the world economy is likely to see some serious change during the next four years.
People in both the UK and the US have voted for this change – whether it means we really do ‘take back control’ or it makes us ‘great again’ remains to be seen.
*Lloyd Davies is Director of Operations at the Conveyancing Association and Managing Director at Convey Law