With the Autumn Budget 2025 set for 26th November, John Fraser-Tucker, Head of Mortgages at online mortgage broker Mojo Mortgages, provides expert insight into how Chancellor Rachel Reeves’ proposals could shake the UK housing market. From a permanent 95% mortgage guarantee and relaxed lending rules to potential property taxes on homes over £500,000 and lifetime gifting caps, Fraser-Tucker outlines the implications for first-time buyers, regional markets, and overall mortgage affordability heading into 2026.
From what we can tell so far, the Chancellor’s Autumn Statement will mark a clear shift in the UK government’s housing agenda, signalling both support and caution for the property market. While permanent mortgage guarantees and relaxed lending rules could help thousands onto the property ladder, new taxation proposals risk dampening affordability and activity in key regions.
The decision to make the 95% mortgage guarantee scheme permanent was “undeniably good news” for first-time buyers struggling to save large deposits, says John Fraser-Tucker.
“In a world where rising rents make it nearly impossible to save, a permanent 5% deposit scheme gives people a fighting chance of homeownership. But while it unlocks the door, it doesn’t necessarily make the room affordable. Mortgage rates and house prices still do the heavy lifting.”
He adds that easing loan-to-income limits, allowing more buyers to borrow over 4.5× their salary, could help more people secure the homes they want, but warns of longer-term financial strain if rates remain elevated. “We’ve seen that increasing borrowing power without tackling housing supply risks pushing up prices. That could make the very policy designed to help first-time buyers end up working against them.”
Regional Divide: The £500k Question
Reeves’ reported plans to review or replace stamp duty with a new property tax on homes sold above £500,000 will have very different effects across the country.
“In large parts of northern England or the Midlands, £500,000 still buys a substantial family home,” says Fraser-Tucker. “But in many areas of London, the South East and parts of the South West, that’s the entry-level price for a modest three-bedroom house. It’s critical that any new tax regime recognises those regional realities.”
Mojo Mortgages’ internal analysis shows that over 44% of houses in Greater London cost over £500,000, versus just over 12% on average across the UK as a whole“, meaning many ordinary buyers in certain areas of the UK could face higher transaction costs if such a policy were introduced.
“A tax system that unintentionally penalises families in high-cost areas could reduce market mobility, discourage upsizing, and slow down chains,” Fraser-Tucker adds.
Bye Bye to the Bank of Mum and Dad? Lifetime Gifting Caps in Question
“Introducing a lifetime gift cap in the UK would severely disrupt the housing market and create a significant hindrance for first-time buyers, many of whom rely on the ‘Bank of Mum and Dad’ for their deposits.”
Currently, large lifetime gifts may be exempt from Inheritance Tax (IHT) if the ‘donor’ survives seven years. “A cap would drastically reduce the tax-free funds parents or grandparents can provide. Internal proprietary data from Mojo Mortgages customers shows nearly a quarter (23% in 2025) of first-time buyers receive financial assistance from family – we imagine the overall number is unofficially even higher than this. Limiting this support would dramatically reduce the size of deposits FTBs can raise. This action would inevitably slow transaction volumes at the entry-level of the property ladder, worsening the housing affordability crisis for those needing a leg up,” states Fraser-Tucker.
Implications for the Mortgage Market
From a market perspective, the measures are likely to create short-term demand spikes among first-time buyers eager to benefit from the permanent guarantee scheme. However, lenders may face increased exposure to higher-risk, high-LTV loans. “Lenders will need to balance the government’s appetite for growth with their own risk models,” says Fraser-Tucker. “A permanent guarantee gives reassurance, but it doesn’t eliminate risk. The challenge will be ensuring these loans are sustainable for borrowers as well as lenders.”
At the same time, if a new property tax is confirmed, the market could see a slowdown at the upper end as homeowners hold off selling, putting more strain on already limited housing supply.”
Expert Outlook for 2026: Cautious Optimism
Fraser-Tucker concludes that the proposed changes, due to be detailed on 26th November in the Reeves Autumn Budget, “offer promising steps for accessibility but come with caveats for long-term stability.
Overall, the direction of travel seems positive for first-time buyers who have been locked out of the market for too long. But the government must ensure that policies designed to open doors don’t end up widening the affordability gap. Sustainable lending, balanced taxation, and meaningful supply reform must go hand in hand if they’re to create a housing market that truly works for everyone.”
