Paula Higgins, CEO of the HomeOwners Alliance and a long-standing champion of homeowners and aspiring buyers, warns that households are facing growing risks ahead of the upcoming Budget. She says months of chaotic speculation and shifting tax proposals have drained confidence from the housing market, leaving homeowners anxious about what lies ahead.
“This Budget process has been chaotic. Six months of public brainstorming has drained confidence from the housing market, paralysing activity and leaving homeowners anxious. The housing market thrives on confidence and it’s clear to us that confidence has been the silent casualty.
On inheritance tax proposals, the Chancellor must face reality. For millions, the Bank of Mum and Dad is the step up to homeownership. Restricting gifting won’t level the playing field – it will pull the ladder up and lock more young people out of owning a home. Our recent research shows 54% of homeowners with adult children have or expect to help them buy; half wish they could do more; and one in four already feels guilty they can’t. This proposal will make this situation worse.
If a mansion tax is introduced, in the form of a 1% levy on properties worth at least £2 million, with an annual charge of 1% of the amount over that threshold, there must be a long lead-in time. Homes are people’s security, often their pension. Many people have prioritised owning a home over all else and are asset-rich and income-poor; they would struggle to afford a sudden new annual charge. A ‘mansion tax’ also hits ordinary family homes in London and the South East far more than the rest of the UK.
On proposals to hike council tax for bands F, G and H, homeowners feel like sitting ducks. Homeowners in those bands are already paying significant amounts, and any further tax hikes risk punishing people whose incomes haven’t kept pace with property values, hitting families who are asset-rich but cash-poor.
Most importantly, any attempt to raise council tax or introduce a mansion tax cannot be fair without a full, nationwide revaluation of homes. Council tax bands are still based on 1991 values. Trying to bolt new charges onto a 34-year-old valuation system risks huge distortions — punishing some households purely because their area has risen in value or they have invested in their home, while others with equally valuable homes escape. If the government wants fairness, it must first face up to the need to revalue the vast majority of the housing stock.
We welcome plans to replace Stamp Duty. We’ve campaigned for scrapping stamp duty for over a decade because it’s a tax on aspiration and movement. But any replacement must be consulted on properly, with winners and losers clearly understood, so people can plan their finances. This toxic cycle of SDLT fiddling, with tweaks, holidays, exemptions, etc, with all the unintended consequences, needs to stop.
Our clear ask to the Chancellor is this: homeowners need stability, predictability and fairness. That means a full and transparent consultation on any changes to property taxation; a long-term, consistent framework that households can plan around; and if the government wants a fairer system, it must start with a modern revaluation rather than layering new taxes onto an outdated one. The country needs a housing tax strategy, not more policy made on the hoof.”
Get Prepared
In the meantime, if your readers want to prepare for the impact, the following tips may help:
1. Check your mortgage
Making sure you’re on the best mortgage deal is one of the easiest ways to cut household bills.
For example, if you’re on your lender’s standard variable rate, you may be paying hundreds of pounds a month more than you need to.
And if your current mortgage deal ends in the next six months, it’s a good idea to look at your remortgage options ASAP before the Budget. That way, you can lock in a rate now in case mortgage rates spike in the days after the Budget. And if rates continue to fall, you can always swap to a better rate. Check out our page of best mortgage rates updated daily.
2. Don’t overpay for energy
Ofgem says consumers could save £200 a year on energy bills by switching energy suppliers and fixing your deal. So take action. Use our free tool to compare energy deals and switch
3. Make money from your house
As well as saving on your outgoings, also see if you can increase the amount of money you have coming in. For ideas, see our guide How to make money from your home.
