Across both sides of the Atlantic, the dream of affordable housing is slipping further out of reach for millions, as policy missteps, economic turbulence, and political finger-pointing deepen crises that touch everyone from first-time buyers to renters and the homeless. In the United Kingdom, decades of underinvestment and policy failures have left young workers chasing security in a market defined by chronic accommodation insecurity and sky-high prices. Meanwhile, in the United States, President Donald Trump’s latest round of tariffs—set to take effect October 1, 2025—are poised to make the already dire housing affordability crisis even worse, with rising construction costs threatening to price out hundreds of thousands more families.
At the heart of the UK’s problem is a story that’s been building for nearly half a century. As recounted at the Deal Catalyst UK Mortgage Finance conference in London on September 29, 2025, experts agreed that strong cities are the backbone of national economic resilience. But as Bill Blain, CEO of Windshift Capital and author of The Morning Porridge, observed, “The greatest threat to the UK’s resilience is not immigration, but inequality and the unaffordability of accommodation in its cities.” According to Blain, London—often lauded as one of the world’s most cosmopolitan and vibrant metropolises—has become a place where most young workers face little hope of ever owning a home unless they have the backing of wealthy parents. “A lack of ‘accommodation security’ is killing the London dream,” he wrote, highlighting how regulatory hurdles and the need for large deposits have left many chasing “increasingly dismal rental accommodation at grossly inflated rising costs.”
The roots of the UK’s crisis run deep. For nearly 50 years, a toxic mix of unaffordable private ownership policies, the infamous right-to-buy scheme, and a failure to replenish social housing stock has created a market where supply cannot keep up with demand. “The crisis in accommodation has been nearly 50 years in the making,” Blain noted, pointing to the consequences of policies that have failed to make home ownership accessible or to provide enough affordable rentals. The result? Chronic insecurity, with the young and less affluent bearing the brunt.
Despite the Labour Government’s rallying cry of “Build Baby Build,” home construction remains well short of the pledged 1.5 million new homes for the current parliament. While building rates are up, the gap between what’s promised and what’s delivered remains stubbornly wide. “Although home building is rising, the number of new homes continues to fall well short of what is needed,” Blain warned. The irony is that there’s no shortage of private capital available to finance new homes—funds can be raised through RMBS, Covered Bonds, and hybrid capital. Yet, bureaucratic delays in planning and heavy regulatory burdens on mortgage lenders have become major bottlenecks. “I suspect the real issue is bureaucratic—the delays in planning, and the regulatory burden imposed on mortgage lenders,” he added, suggesting that only radical policy reform can break the logjam.
The situation is no less fraught in the United States, where the housing crisis is being exacerbated by a new round of tariffs announced by President Trump. Effective October 1, 2025, these tariffs include a staggering 50 percent tax on imported kitchen cabinets and bathroom vanities, 30 percent on upholstered furniture, and 25 percent on heavy trucks used in construction. These add to existing tariffs on steel, aluminum, and lumber that have already driven up construction costs throughout the year. According to the National Association of Home Builders (NAHB), tariffs had already added about $10,900 to the cost of building a typical new home by April 2025—before the latest round was even announced.
Each additional $1,000 in construction costs, NAHB calculates, prices out more than 115,000 potential home-buying families. With the US facing a shortfall of at least 3.7 million homes, over 770,000 people homeless in 2024, and nearly 75 percent of households unable to afford a median-priced new home, the stakes could hardly be higher. Mortgage rates, hovering around 6.4 percent, only add to the pain. The affordability crisis is squeezing everyone—from renters scrambling for scarce apartments, to homeowners delaying renovations, to builders struggling with supply chain chaos.
Tariffs, as it turns out, don’t just make materials more expensive—they introduce uncertainty that ripples through the entire construction process. Developers, forced to plan projects months or even years in advance, now face unpredictable material costs. This volatility has already shown up in the numbers: Single-family housing starts fell to a near 2.5-year low in August 2025, while permits dropped to levels not seen since April 2023. Developers like Anthony Hrusovsky of Chicago’s Mavrek Development are feeling the squeeze. As he told the Chicago Tribune, tariffs “killed” negotiations with a major investor for a planned 25-story project, adding a level of risk that was previously “riskless in our eyes.”
Some of the most acute pain is being felt in the lumber market. Canada supplies roughly 85 percent of all US softwood lumber imports, but the Trump administration recently hiked tariffs on Canadian lumber from 14.5 percent to 35 percent. American sawmills simply can’t fill the gap, meaning builders are stuck paying more—whether they buy Canadian lumber with tariffs or American lumber from a market with limited supply. These costs don’t just hit new builds; they also make home renovations pricier, potentially slowing the broader renovation industry and affecting property values.
Renters, too, are caught in the crossfire. As construction costs rise and fewer apartments are built, competition for existing rentals tightens, driving up prices. Some would-be buyers, priced out by higher costs and mortgage rates, are forced to remain renters longer, adding to demand. The Trump administration, for its part, rejects blame for the crisis. White House spokesperson Kush Desai told Vox, “America’s housing affordability was dramatically worsened by Joe Biden’s open border policies that let tens of millions of illegal migrants walk into the country and overburden housing markets that were already grappling with cumbersome regulatory hurdles.” Desai insisted that the administration’s “multi-pronged approach” includes mass deportations, deregulation, and policies aimed at paving the way for further interest rate cuts.
Yet, these measures may be at odds with the realities on the ground. More than a third of US construction workers are foreign-born, and the administration’s immigration enforcement actions have already begun to disrupt construction sites. A 2024 study found that counties affected by the Secure Communities program—responsible for removing about 400,000 people between 2008 and 2013—lost nearly a year’s worth of residential construction over four years. New homes became 18 percent more expensive within three years, and overall home prices increased by 10 percent. “You need the relatively lower-skilled folks to come in and frame the house before you need the relatively higher-skilled workers to come in and finish the house,” researcher Troup Howard explained to Vox. When those workers aren’t available, the entire industry slows down.
While both the UK and US governments have made bold promises to address their respective housing crises, the gap between rhetoric and reality is glaring. In the UK, radical reforms are needed to cut through red tape and unlock the private capital waiting in the wings. In the US, trade and immigration policies may be working at cross-purposes, driving up costs and deepening shortages. For millions on both sides of the Atlantic, the hope of affordable housing remains just that—a hope, not a reality.
As the world’s great cities struggle to remain engines of opportunity and resilience, the real solutions may lie not in blaming outsiders or tinkering at the margins, but in embracing bold, coordinated action to make housing accessible for all.
