Residential Property Review – August 2025

Bank Rate cut to 4% (lowest in over two years) but mortgage rates remain stable UK house price growth forecast has been lowered to 1% in 2025 as high supply prompts more competitive pricing Homes gained 20% in value since 2020, with northern regions leading growth while parts of London face declines 

Another reduction to Bank Rate 

In its August meeting, the Bank of England (BoE) voted to reduce Bank Rate from 4.25% to 4%. This is the fifth cut since August 2024 and the lowest level in over two years.  

The decision may have come as a surprise to some, as inflation rose to 3.6% in June and 3.8% in July according to the Office for National Statistics. The BoE expects inflation will increase to around 4% in September (double its target of 2%) but believes that the spike will be temporary. 

The reduction in Bank Rate may present opportunities for borrowers on tracker mortgages and those with fixed deals that are coming to an end. However, mortgage rates might not see a significant change. Richard Donnell at Zoopla explained, “The price of fixed rate mortgages already factors in the future path of base rates meaning average mortgage rates are likely to remain broadly where they are today.” 

Housing market update 

The housing market has had some setbacks this year, but buyer activity is slowly improving.  

Savills has revised its forecast for UK house price growth in 2025 from 4% to 1%, following a ‘cautious start to the year and the potential for more buyer jitters in the run up to the Autumn Budget given the state of public finances.’ 

Housing supply currently remains high, as buyers have the most choice in over 10 years, according to Rightmove. This has prompted sellers to rethink their pricing, with TwentyCi reporting 21% more price adjustments between May and July than the same period last year. As a result of this competitive pricing, sales agreed are up 8% annually according to Zoopla. It will take some time before this improved activity has a knock-on effect on house price growth due to stock being high.  

UK homes gain 20% in 5 years 

Research from Zoopla has found that the average home has increased in value by 20% since the pandemic, amounting to an average gain of £55,800. 

One million homes have increased by 50% or more, gaining £117,400 on average. More than half of these properties can be found in the North West, Wales, and Yorkshire and the Humber. These areas have become more popular among buyers in recent years as they offer more affordable options and are suited to lifestyle changes made since the pandemic.  

In more expensive regions, including the south of England, the growth is more modest – half (51%) of properties have increased in value by 20%. Meanwhile, London has experienced difficulties, with 13% of homes dropping in value by 5% or more. Kensington and Chelsea, and Westminster have been the hardest hit, as nearly half of properties in these boroughs are now below their pre-pandemic price.  

How’s the Scottish housing market faring?  

Data from Registers of Scotland shows that residential transactions increased by 7% annually in Q1 2025, the fourth consecutive quarter of growth.  

The rise contributed to higher Land and Buildings Transaction Tax revenue, which the Scottish Government estimated to be £484.7m in 2024/25, up 14.8% on the previous tax year. 

According to UK Finance, in 2024/25 the number of mortgages advanced to Scottish first-time buyers (FTBs) increased by 17.0% year-on-year. In Q1, the average loan-to-value ratio was 82.4% for FTBs and 69.6% for home movers.   

As for the rental market, data from letting agents shows that there has been a decline in new-let private rental growth in recent years. The annual growth rate recorded in Citylets Rental Index was 4.4% in Q1 2025, significantly lower than the peak of 13.7% in Q3 2023.  

All details are correct at the time of writing (20 August 2025) 

It is important to take professional advice before making any decision relating to your personal finances. Information within this document is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor. No part of this document may be reproduced in any manner without prior permission 

Commercial Property Market Review – August 2025

London’s data centre demand is set to hit record highs in 2025, driven by hyperscalers and AI providers Retail property investment rebounded strongly in Q2, with high-street demand at its highest since 2021 UK commercial property remains mixed, with stronger growth in Central London offices and industrial rental markets 

Take-up of data centres in London is forecast to hit new highs in 2025, according to CBRE. 

The capital is expected to see take-up of 183MW (mega watts) of power capacity this year, 58% more than in 2024 and double the 2021 total. This spike is largely driven by hyperscalers, but requirements from artificial intelligence (AI) providers are also beginning to dominate the demand for capacity.  

Electricity is more expensive in the UK than in other European countries, however investors continue to be attracted to London due to its established ecosystem. Currently, around 80% of all UK data centres are found in the capital and its surrounding areas.  

Providers in London are struggling to keep up with the demand for data centres. Nearly all the new space expected this year will be accounted for before it is complete. As a result, the capital’s vacancy rate is anticipated to fall to 8% by the end of 2025.  

Retail investment makes a strong comeback  

The retail property sector saw a bounce back in investor interest in Q2. 

According to Rightmove, retail investment demand was 35% higher between April and June than the same period last year. This marks a positive shift for the sector, which had seen a lull in interest from investors since 2022, with demand down 15% year-on-year in Q2 2024. The rebound is driven by high-street investment demand, which has gone up by 56% annually to the highest level since 2021.  

Meanwhile, supply levels in the retail sector have been decreasing since the beginning of 2024, now 4% lower than a year ago. This limited availability may have helped to increase demand for retail properties on the market.  

Andy Miles at Rightmove commented, “Rate cuts are helping investment into commercial property and after a period of decline it appears that retail and office spaces are becoming more attractive to invest in.” 

RICS’ sector overview 

The latest analysis from the Royal Institution of Chartered Surveyors (RICS) shows that overall, the UK commercial property market was largely stagnant in Q2 2025.  

Occupier demand dipped slightly when compared with the previous quarter, with net balance figures showing marginal changes of +2% for offices and +4% for industrial property.  

Conditions for the office sector are much more positive in Central London, where occupier demand is stronger than the national average. Meanwhile, vacancies rose in sectors across the country, prompting landlords to offer incentives to bring in tenants.  

Looking ahead, RICS survey respondents were divided on what’s to come, with 35% believing the market is moving upwards and the same proportion expecting it to take a downturn. However, most did agree that the office and industrial sectors will see growth in rental prices in the coming year.  

Scottish market update 

Scotland’s commercial property market showed some resilience in Q2, even as the wider economy contracted. 

According to the Scottish Government, onshore GDP fell by 0.2% in May due to fluctuating business confidence. Meanwhile, Colliers reported that investment volumes fell from £560m in Q1 to £370m in Q2, about 22% lower than the five-year quarterly average but similar to Q2 2024 levels. There were some positive signs, as investment transaction volumes were 20% higher in H1 2025 than in the same period in 2024.  

So far this year, the office sector has accounted for the largest share of investment activity (25%). Despite this, office investment slowed to £100m, the lowest quarterly figure in over a year. The largest deal came from property investment firm, Pontegadea, which bought Capital Square in Edinburgh for £75m. Meanwhile, prime yields in city centres remained steady in Edinburgh (6.50%) and Glasgow (6.75%). 

All details are correct at the time of writing (20 August 2025) 

It is important to take professional advice before making any decision relating to your personal finances. Information within this document is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor. No part of this document may be reproduced in any manner without prior permission 

News in Review

GDP grew 0.3% in Q2, exceeding forecasts, but underlying conditions show fragility and weak confidence Ukraine peace talks progressed with US-led NATO-style security guarantees, though no ceasefire agreement has yet been reached UK data centres are set to rise nearly 20%, driven by AI demand, raising environmental and cost concerns 

“The strong growth seen earlier this year was a one-off and underlying conditions remain fragile” 

The UK economy grew modestly in Q2, with gross domestic product (GDP) increasing by 0.3% according to the Office for National Statistics (ONS). While this is a slowdown from Q1 (0.7%), it is more positive than City economists’ and the Bank of England’s predictions of 0.1% expansion.  

The economy performed better than expected in June with monthly GDP growth of 0.4%, following falls of 0.1% in both April and May. Between April to June, the services sector grew by 0.4%, driven by information and communication technology. Meanwhile, construction output increased by 1.2%, likely due to the dry weather boosting activity.  

Confederation of British Industry Lead Economist, Ben Jones, commented on the statistics, “The strong growth seen earlier this year was a one-off and underlying conditions remain fragile. With business costs mounting, the labour market cooling, investment intentions weakening and confidence generally subdued, the UK is walking a narrow path between resilience and stagnation.” 

Chancellor Rachel Reeves said that the figures “are positive with a strong start to the year and continued growth in the second quarter. But there is more to do to deliver an economy that works for working people.” 

Negotiations intensify to end the Russia-Ukraine war   

Presidents Putin and Trump met in Alaska last Friday to discuss an end to Russia’s war on Ukraine. No decisions were made, but it became clear that Vladimir Putin will not call a ceasefire without seizing control of the Donbas region. However, President Zelensky has repeatedly said he will not concede as Ukraine’s constitution forbids giving up territory.  

Following this, European leaders and NATO Secretary General, Mark Rutte, joined Zelensky at the White House on Monday, when Trump pledged US coordination of NATO-style security guarantees, to be primarily led by Europe, to deter further Russian aggression. Zelensky called the assurances a “strong signal,” expecting formalisation within 7-10 days. Trump also took to social media to say he would arrange direct talks between Zelensky and Putin, followed by a trilateral summit. The meeting was broadly seen as constructive, though no ceasefire was agreed. 

Prime Minister Keir Starmer said the talks could be a “historic step” towards security for Ukraine. 

Housing market slightly retreats 

The housing market lost momentum in July, according to the latest survey from the Royal Institution of Chartered Surveyors (RICS). There had previously been signs of tentative recovery, with new buyer enquiries reporting a net balance of +4% in June. However, this figure fell back into negative territory in July with a recording of -6%. Regional results varied significantly, with weaker demand in East Anglia, the South East and South West of England.  

The net balance of sales dropped from -4% to -16% in July. Looking ahead, the near-term sales outlook is flat with a reading of +1%, down from +7% previously. Simon Rubinsohn, Chief Economist at RICS, said, “The somewhat flatter tone to the feedback to the July RICS Residential Survey highlights ongoing challenges facing the housing market. Although interest rates were lowered at the latest Bank of England meeting, the split vote has raised doubts about both the timing and extent of further reductions.” 

UK data centres 

The number of data centres in the UK is expected to rise by almost 20%, according to construction researchers Barbour ABI. Data centres are large warehouses that store IT systems and their associated components. There are currently around 477 data centres in the UK, but this figure is set to increase by nearly 100 due to the rise of Artificial Intelligence (AI), which requires significant power. More than half of these centres will be in London and the surrounding areas, while the largest investment is a £10bn data centre in Blyth, near Newcastle – work is due to start in 2031 and will eventually cover 540,000 square metres. 

There are concerns about the impact these plans will have on the environment due to the large amount of energy and water needed to power the data centres.  

Here to help 

Financial advice is key, so please do not hesitate to get in contact with any questions or concerns you may have. 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. 

All details are correct at time of writing (20 August 2025) 

In the news – Wealth

IHT revenues are expected to hit £9.1bn in 2025/26, rising to over £14bn by 2030 Higher-rate taxpayers could miss out on £97,000 in extra pension wealth by not claiming full tax relief through self-assessment Scrapping non-dom tax status may risk public revenues rather than boost them 

IHT receipts continue to rise 

HMRC figures1 show the 2024/25 tax year saw a record £8.2bn raised in IHT. The new tax year started in the same vein with the Treasury collecting £780m in IHT in April 2025, up £97m from April 2024, making it the second-highest monthly IHT total on record. According to the OBR’s Spring Statement forecast, IHT revenues are expected to hit £9.1bn in 2025/26, rising to over £14bn by 2030. 

Don’t miss out on tax relief 

Higher-rate taxpayers could miss out on up to £97,000 in extra pension wealth by not claiming full tax relief through self-assessment2. While 20% relief is automatic, higher-rate taxpayers can claim an extra 20% and additional-rate taxpayers up to 25%. Understandably, many people don’t realise there are extra steps required to claim full tax relief, but even if you don’t complete a tax return, HMRC can be contacted to claim the additional relief. 

The cost of non-domicile tax reform 

A report from the Centre for Economics and Business Research (Cebr)3 has warned that Chancellor Rachel Reeves’ plan to scrap tax exemptions for resident non-domiciled individuals could reduce public revenues by up to £12.2bn by July 2029. Cebr estimated that if a quarter of non-domiciled remittance basis taxpayers leave the UK due to the reforms, the net gain to the Treasury would be zero. 

1HMRC, 2025, 2Interactive Investor, 2025, 3Cebr, 2025 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. The Financial Conduct Authority (FCA) does not regulate Will writing, tax and trust advice and certain forms of estate planning. 

Why ‘keep calm and carry on’ pays off for investors

Trying to time the market often leads to missed opportunities A well-diversified portfolio helps wealthier short-term volatility Staying invested long term is key to building lasting wealth 

April’s surprise tariffs announced by Donald Trump on ‘Liberation Day’ unsettled global markets and caused a sharp sell off from panicked investors. Trump announced a 90-day pause of the reciprocal tariffs on 9 April and markets picked-up. The recovery then continued in the weeks following but uncertainty continues, leaving many investors asking – “when is the right time to invest?” 

Is there ever a perfect moment? 

It’s natural to feel more cautious during periods of uncertainty, but waiting for the ‘right’ time can often mean missing out completely. Markets tend to recover, and investors who resist the urge to sell, often find that patience is rewarded. In fact, history shows some of the best investment days followed the worst days, although trying to predict when is notoriously difficult. 

Managing emotions and expectations  

Negative headlines can encourage investors to switch or sell their investments, but emotional investment decisions rarely lead to better outcomes. A diversified, well-built portfolio should be able to manage short-term volatility while you stay focused on your long-term goals. Instead of trying to time the market, consider your long-term plans. The sooner you start, the more time your investments have to grow. 

Time in the market, not timing the market 

And the longer you’re invested, the more likely you are to benefit from long-term growth. Research shows that staying invested through the ups and downs beats jumping in and out of the market based on short-term events. In other words, it’s time in the market that matters most. 

Confidence and clarity 

We can help make a plan that suits your goals, time horizon and risk appetite, giving you the confidence to invest calmly, whatever the market is doing. 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. 

Home insurance premiums and claims increase

UK combined home insurance premiums rose 8.5% to an average of £231 according to recent data Material shortages, labour expenses and inflation rates have driving up repair and rebuild costs Make sure you don’t invalidate your insurance by leaving a spare key where it can be easily found 

Extreme weather conditions. Rising construction costs. Higher property prices. These are some of the factors that have contributed to an 8.5% increase in combined home insurance premiums in the UK. 

According to data1 for the fourth quarter of 2024, the average cost for an annual buildings and contents policy rose to £231 a year – although there are significant regional variations. For example, the median cost for Greater London, the second most expensive location, came in at £336, while Scotland was closer to the national average at £228. The cheapest regions were the North East at £190 and the North West at £196. 

Material shortages, labour expenses and inflation rates have all played a part in driving up repair and rebuild costs for insurers, who have also seen a surge in claims. A record £886m2 was paid out for domestic property claims by British insurers in the first quarter of 2025, a 20% increase on the same period last year, with adverse weather a major cause. 

Weather the storm 

Despite the uptick, there are ways to save on your home insurance: from taking out a combined policy and avoiding unnecessary add-ons to shopping around and paying annually. The premium you pay will also be influenced by factors closer to home: from bedroom numbers to burglar alarms. We can help you source the most suitable cover for your needs. 

Planning a summer holiday? 

Make sure you don’t invalidate your insurance by leaving a spare key where it can be easily found. Most policies only accept theft claims if there are signs of a forced entry. 

1Go.Compare, 2025, 2ABI, 2025 

News in Review

Bank of England cuts Bank rate to 4%, aiming for 2% inflation target medium-term NIESR warns Labour may need tax rises to meet fiscal rules and address growing budget deficit Trump’s new tariffs impact over 90 countries, with negotiated lower rates offering partial stability post-deadline 

“We will do what it takes to return inflation to our 2% target” 

The Bank of England (BoE) cut Bank Rate from 4.25% to 4% at its August meeting last week, the fifth reduction since August 2024. It seems that it wasn’t an easy decision, as it took two rounds of votes for the Monetary Policy Committee (MPC) to reach a majority.  

Ultimately, five MPC members supported the quarter-point reduction while four pushed to keep rates at 4.25%. According to the BoE, the rate cut was informed by the continuing path of disinflation in domestic price and wage pressures. Also, it was hoped that the reduction would help boost the economy and jobs market. The vote was split on expectation that inflation will rise to around 4% in September. The BoE believes that inflation will come back down once these temporary factors have passed.  

Andrew Bailey, BoE Governor, commented, “We set monetary policy in a forward-looking manner to return inflation to the 2% target sustainably over the medium term. That sometimes means that we will be able to look through developments that we think are unlikely to last. But we stand ready to adjust our course if we see shifts in the balance of risks to the medium-term outlook for inflation. We will do what it takes to return inflation to our 2% target.” 

Quarterly Monetary Policy Report  

The BoE also released the latest Monetary Policy Report on Thursday, outlining its analysis of the economy and predictions for the coming months. Twelve-month CPI inflation was an average of 3.5% in Q2 – 0.1 percentage points higher than predicted in the May report. The MPC predicts this will decrease to 2.7% by Q3 of next year. Four-quarter GDP growth is expected to stay around 1.2% and to increase over the next year to 1.3%, dependent on a sustained fall in the household saving ratio.  

Taxes likely to be raised in Autumn Budget  

The National Institute of Economic and Social Research (NIESR) has warned that taxes will likely be raised in the Autumn Budget 2025. When Labour came into power last year, it set itself a rule that the government should only borrow for investment, meaning day-to-day spending should be covered by government revenue (mainly taxes). However, in June borrowing hit the second-highest figure since monthly records began and NIESR has calculated that, by the tax year 2029/30, the government could have a deficit of £41.2bn. Chancellor Rachel Reeves will therefore need to make up the shortfall if she is to reach her own target. 

David Aikman, Director of NIESR, observed that Reeves faces “an impossible trilemma.” He explained, “the Chancellor cannot simultaneously meet her fiscal rules, fulfil spending commitments, and uphold manifesto promises to avoid tax rises for working people.” NIESR has therefore recommended a “moderate but sustained” increase in taxes to rebuild the fiscal buffer. The think tank suggests this could be done by extending the freeze to Income Tax thresholds, cutting the current £20,000 cash Individual Savings Account (ISA) allowance and adjusting Corporation Tax rates. However, it acknowledged that each of these options comes with its own drawbacks.   

Trump’s tariffs take effect 

Trump’s tariffs came into effect last Thursday, affecting over 90 countries worldwide. The President first announced his plans to increase import taxes in April. Since then, many countries (including the UK) have negotiated their own lower rates with the US before the deadline of 7 August. Moments before midnight, Trump claimed on social media that “billions of dollars in tariffs” would be flowing into the US.  

While the policies have caused uncertainty in many countries, it is hoped that there will be some stability now that rates have been set. Economist Bert Hoffman from the University of Singapore said, “This is supposed to be it. Now you can analyse the impact of the tariffs.” 

Labour market shows gradual slowdown 

Office for National Statistics (ONS) data, released on Tuesday shows that job vacancies are down 5.8% to 718,000 and payroll numbers have slipped, especially in hospitality and retail. Despite this, wage growth remains at 5% and unemployment steady at 4.7%, indicating gradual slowdown. 

Here to help 

Financial advice is key, so please do not hesitate to get in contact with any questions or concerns you may have. 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. 

All details are correct at time of writing (13 August 2025) 

Healthy uptick in investing confidence

Investment optimism has surged, particularly among under-35s Over half of 25-34s are now actively investing, with many planning to increase contributions Long-term strategies can help convert confidence into meaningful financial outcomes 

UK investors are showing renewed confidence, with last year marking a notable shift in sentiment – particularly among younger wealth-builders. According to research1, investment confidence among UK adults has surged 25% year-on-year, with 65% of respondents expressing optimism about investing. 

This trend is especially pronounced among the next generation of high-net-worth individuals. An impressive 87% of those aged 25 to 34 and 75% of 18 to 24 year-olds reported investment confidence – annual uplifts of 15% and 10% respectively. 

More broadly, active participation is also on the rise. Nearly one-third of UK adults (31%) are investing – up 5% from last year. Among 25 to 34-year-olds, that figure jumps to 54%, reflecting a 13% increase. Importantly, appetite is still growing – 26% of this age group intend to begin investing in 2025, while 38% aim to increase their contributions. 

These shifts highlight a generational pivot toward long-term wealth creation – an encouraging sign. With investor confidence on the rise, now’s the time to put idle wealth to work. Holding cash may feel safe, but it risks erosion and missed opportunity. A clear, long-term investment strategy, guided by advice, can turn confidence into action and help ensure your money supports your goals for the future. 

1Moneybox, 2025 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. The Financial Conduct Authority (FCA) does not regulate Will writing, tax and trust advice and certain forms of estate planning. 

In the News – Money

UK Q1 dividends fell 4.6% but beat expectations The headline total paid out to shareholders in Q1 was £14bn UK holidaymakers are spending significantly more this year 

Holiday spending soars 

Planning to jet away on a summer holiday? If so, you’re in good company – 83% of UK adults1 are planning holidays this year. Interestingly, 41% of people are intending to spend more than they did last year – boosting budgets by nearly £3,000 per trip, with 14% of those expecting to pay more, setting aside over £5,000 per trip and 2% over £20,000. People are obviously keen to spend their hard-earned money on travelling, with data showing holiday spending has soared 520% since the pandemic2, as priorities shift. If you’re off on your travels this summer – bon voyage! 

Dividends set to bounce back 

Dividends paid out by UK companies fell by 4.6% in the first three months of 2025, new figures3 reveal, but payouts still managed to beat expectations. The headline total paid out to shareholders in the first quarter was £14bn, down from £14.7bn a year earlier. Lower one-off special dividends were the main reason for the fall. 

One major outlier to the decline was pharmaceutical companies, which showed the fastest dividend growth in a decade during the quarter. In Q1 2025; they paid out £3.2bn, up £228m from 2024. For the fourth consecutive year, pharma giant AstraZeneca was the largest dividend payer in Q1. 

The report suggests Q2 will be positive. Mark Cleland, CEO of Governance Services and CEO of Issuer Services UCIA, commented, “As US trade policy convulses capital markets, investors are absorbing the likely impact on corporate profits. Despite this, Q1 was a little better than we expected, and Q2 is shaping up well too, with the fastest growth coming from banks.” 

For the whole of the year, Computershare upgraded its expectation for underlying growth to 1.8% on a constant currency basis, suggesting a total of £85.6bn in regular dividends for 2025. Let’s see what Q3 and Q4 hold in store. 

1Computershare, 2025, 2Aviva, 2025, 3Nationwide, 2025 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. Financial protection policies typically have no cash-in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse. As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments. 

News in Review

The IMF has revised its global economic growth forecast upwards for 2025 and 2026, despite ongoing trade tensions A recent Supreme Court ruling has limited compensation claims for car finance customers, but a redress scheme is under consideration The Inheritance Tax take has risen due to higher asset values and frozen tax thresholds 

“The world economy is still hurting”  

The International Monetary Fund (IMF) has predicted global economic growth of 3% in 2025 and 3.1% in 2026. This is an upward revision from the IMF’s forecast in April, partly due to recent front-loading in anticipation of higher tariffs. Easier financial conditions and fiscal expansion in some major jurisdictions also contributed to the improved outlook.  

Despite the revision, forecasts are lower than the 3.3% rate predicted in January for both 2025 and 2026, indicating that trade tensions have impacted the economy. Higher tariffs continue to pose a risk to the global economy, along with geopolitical tensions and increased uncertainty. IMF Chief Economist, Pierre-Olivier Gourinchas, commented, “The world economy is still hurting and it’s going to continue hurting with tariffs at that level, even though it’s not as bad as it could have been.”  

Meanwhile, global inflation is expected to decline to 4.2% in 2025 and 3.6% in 2026 but will likely remain above target in the US. For the UK, predicted growth remains unchanged from May – 1.2% in 2025 and 1.4% in 2026. This keeps the UK on track to be the third fastest growing economy in the G7 (the world’s advanced economies). 

Latest US tariffs 

President Donald Trump has announced new tariff rates on imports from dozens of countries. The higher rates come into effect on 7 August, except for Canada’s 35% tariff which was effective from 1 August. However, 90% of Canadian goods are exempt due to the US-Mexico-Canada free trade agreement. Canada’s Prime Minister, Mark Carney, said he was “disappointed” by the decision.  

Some of the highest tariffs are applied to Brazil, which now faces rates of 50% on most goods. Trump has put a 90-day pause on increasing tax for Mexico, so tariffs there remain at 25%. Negotiations are still underway with China, who face a separate deadline of 12 August.   

Supreme Court ruling on car finance  

Millions of motorists are not entitled to claim compensation from car finance companies, according to last week’s Supreme Court ruling. The Court of Appeal had previously found it to be unlawful for car dealers to receive hidden commission from lenders. This would have made millions of consumers eligible for compensation, depending on the details of their car loan. However, the Supreme Court reversed this decision, siding with car finance firms in two out of the three test cases. But in the case of Marcus Johnson, the Court ruled against the lender because the size of the commission (55%) was a ‘powerful indication’ that the relationship between customer and lender was unfair.  

The Financial Conduct Authority (FCA) has confirmed that it will consult on a redress scheme for motor-finance customers, taking into account the Supreme Court ruling to help determine what is unfair.  

House price growth picks up in July 

The latest figures from Nationwide show that annual house price growth increased by 2.4% in July, up slightly from 2.1% in June. Prices went up monthly by 0.6% bringing the average house cost to £272,664. The house price to earnings ratio is now about 5.75, the lowest level in over a decade. It is also a significant improvement on the all-time high of 6.9 seen in 2022.  

Nationwide’s Chief Economist, Robert Gardner, commented, “Providing the broader economic recovery is maintained, housing market activity is likely to continue to strengthen gradually in the quarters ahead.” 

Latest IHT figures 

According to HMRC, the number of estates paying Inheritance Tax (IHT) went up by 13% in the space of a year. In 2021/22, it is estimated that 27,800 estates were subjected to IHT, but this rose to 31,500 in 2022/23. In this time, IHT receipts also rose by 12% to £6.7bn. HMRC attributed the uptick to ‘a combination of higher volumes of wealth transfers following recent IHT-liable deaths, recent rises in asset values, and the Government’s decision to maintain the IHT tax free thresholds at their 2020 to 2021 levels up to and including 2029 to 2030.’ 

Here to help 

Financial advice is key, so please do not hesitate to get in contact with any questions or concerns you may have. 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. 

All details are correct at time of writing (6 August 2025)