With so much speculation doing the rounds ahead of Chancellor Rachel Reeves first budget today, mortgage and property professionals have had much to ponder in terms of specific measures that might impact the sector. Whether it was rumoured changes to stamp duty, planning rules, changes to social housing, the rental market, for CGT or IHT changes, there has been much on her radar. Of course, that’s all in addition to wider measures such as changes to business taxes, changes to the fiscal rules and the impact on gilts possibly affecting mortgage rates etc.
So now we know. Today’s budget statement has now clarified the situation, with the Chancellor announcing measures affecting mortgage and property markets.
Mortgage and Property experts have been sharing their reaction to those measures introduced in today’s budget statement as follows:
Commenting on the Stamp Duty surcharge on second homes by 2% to 5% effective from tomorrow, Stevie Heafford, Tax Partner at HW Fisher said “The Chancellor has increased the surcharge on second homes by 2% to 5% effective from tomorrow. This is a bold move which will have an impact on the property market particularly for individuals who are in the process of selling their first home after acquiring their new main residence.”
Angharad Truman, ARLA Propertymark President comments on the increase to Stamp Duty for second homes saying: “We continue to see a growing disparity in the number of private rented homes available against a backdrop of increasing demand from tenants. Therefore, it is disappointing to see that the UK Government did not address this fundamental issue in its Autumn Budget and instead has announced yet another blow for landlords by increasing Stamp Duty on second homes.
“The private rented sector plays a crucial role in housing the nation with over 4.6 million homes in England alone, therefore it is imperative that the UK Government does not continue to push landlords out of the market.
“In order to ultimately keep people in much needed and affordable private rented homes, we continue to stress the importance of support for the private rented sector including incentives for landlords to invest rather than continuing to penalise them through regulatory bombardment and increasing costs.”
Richard Carter, CEO of Lenvi: “Stabilising inflation rates and the decision not to increase Capital Gains Tax (CGT) on residential property is certainly positive for stimulating growth in the housing market. Not to mention making the mortgage guarantee scheme permanently available at a rate of 95%.
“While we need to be cautiously optimistic, these measures in principle should stabilise mortgage rates, which will start restore home buyer confidence and make it easier for first-time buyers to achieve home ownership.”
Tim Parkes, CEO of RAW Capital Partners, said: “This bumper Budget will not be popular with many property investors or brokers, but the new reality has at least been laid out before them. The level of uncertainty and speculation there has been over recent months regarding potential government reforms has been unhealthy, so having a clearer view on the policies being introduced is an important step forward. Landlords and investors, in particular, are now in the position to make informed choices about their portfolios. And, given the upward trend in property and rental prices this year, plus the recent drop in inflation and interest rates, we could start to see greater growth and momentum within the UK property market, even if the BTL market faces challenges.
“It is also important we see the bigger picture. The private rental sector is being subjected to tax and regulatory reform, but at the same time the government is working to stabilise the economy and drive growth, which was highlighted by today’s commitments to investing in public services. If these initiatives have their desired effect, they could strengthen consumer confidence and set the UK on a clear growth trajectory in the coming years. Therefore, while the abolition of the non-dom tax status and increases to Capital Gains Tax (CGT) and stamp duty may introduce additional complexities or costs for some landlords, we should not overlook the fact that the overarching appeal of the UK as an attractive property investment destination remains strong.
“Now, it’s essential that lenders and brokers step up and support investors who are eager to begin or expand their portfolios in the UK market, which includes providing guidance on how their investments will be impacted by today’s raft of announcements. Reforms are coming. Rather than dwelling on their drawbacks, it’s time to seize the multitude of opportunities that this highly attractive and resilient asset class will continue to provide in the months and years ahead.”
Ross Turrell, Commercial Director at CHL Mortgages, said: “Today’s Budget clearly calls for careful consideration from the buy-to-let (BTL) market. But, given the sector’s proven track record for successfully navigating ever-shifting regulatory and economic landscapes, we should be wary of excessive doom-mongering. Just look at the challenges that BTL landlords have had to respond to over the past decade – while almost every regulatory, tax or legislative reform is framed as an existential threat, the market consistently demonstrates resilience and adaptability.
“The Budget marks another chapter in this ongoing story. The SDLT changes is an obvious challenge, and will not be received favourably by landlords. But at the very least, ending speculation and knowing the details of the policies will bring clarity to the sector after a period of significant uncertainty. This is underpinned by the Chancellor’s broader goal of achieving strong economic growth, which could bolster both consumer and wider property market confidence, ultimately supporting the long-term future of the BTL sector.
“Now, as an industry, our focus should shift to collaboration and building confidence among borrowers, landlords, and brokers as they adjust to new regulatory and tax changes. While it’s tempting to dissect each policy and focus on their potential negatives, our priority must be on providing robust education and support. The reforms have been made – with the right guidance, lenders can help landlords adapt with confidence to ensure a sustainable and resilient BTL market for years to come.”
Angharad Truman, ARLA Propertymark President comments: “We continue to see a growing disparity in the number of private rented homes available against a backdrop of increasing demand from tenants. Therefore, it is disappointing to see that the UK Government did not address this fundamental issue in its Autumn Budget and instead has announced yet another blow for landlords by increasing Stamp Duty on second homes.
“The private rented sector plays a crucial role in housing the nation with over 4.6 million homes in England alone, therefore it is imperative that the UK Government does not continue to push landlords out of the market.
“In order to ultimately keep people in much needed and affordable private rented homes, we continue to stress the importance of support for the private rented sector including incentives for landlords to invest rather than continuing to penalise them through regulatory bombardment and increasing costs.”
Foxtons CEO, Guy Gittins, commented: “Landlords across the nation have been impacted by a raft of legislative changes in recent times and so they will be delighted to see that Capital Gains Tax increases have not been applied to the sale of residential property portfolios.
“We’ve already seen buy-to-let investors return to the lettings market and today’s Budget should reassure many more to remain within the sector. This is good news for tenants across the capital in particular, as it will deliver desperately needed additional stock back to the market.
“That said, the additional stamp duty charged on the purchase of second homes will add to the upfront costs of investing for those looking to grow their portfolios, however, the scale of the increase is unlikely to deter landlords considering the long term gains of this asset class.
“Homebuyers will be understandably disappointed, but not surprised, about the lack of a stamp duty relief extension, with the current thresholds set to revert back as of March next year. However, as they have already factored this into their purchase plans we do not expect it to impact the strong demand we’re currently seeing in the market.
“Today may not have been the Autumn Statement we were hoping for, but it has been what we largely expected. As a result, we can expect the heightened level of market activity seen this year to continue, with market momentum strengthening as we head into 2025, further elevated by forecast interest rate reductions.”
Joe Pepper, UK Chief Executive Office at PEXA, said: “Committing to the building of 1.5 million homes with a £3.1bn investment is fantastic for first time buyers and a sizable investment in affordable homes is welcome as a longer-term fix of the short supply of housing stock. Doing so will naturally create economic growth and stimulate other industries in a wider sense. But there is a huge gaping problem that has not been addressed – how are we going to actually deliver this benefit, if the back end infrastructure supporting the housing market, both for remortgaging and sale and purchase, is simply not fit for purpose? The government said it would ‘put the right policies in place’ to make this a reality, but it has missed one key detail: the urgent need for government commitment to support private investment in the modernisation of technology to make any of this a reality, and to actually benefit both mortgage market professionals and consumers.”
Nicky Stevenson, Managing Director at national estate agent group Fine & Country, said: “Today’s budget gave a mixed outlook for the property market, with second-home owners feeling the full force of these tax rises. We had hoped to avoid increases in property-related taxes that could slow market growth. With the upcoming rise in capital gains tax, landlords of investment properties will now face critical decisions about whether to sell. Fortunately, this increase does not extend to residential properties, which provides some relief for homeowners.
“Labour’s announcement also brings another significant blow to homeowners with multiple properties, as the stamp duty charge for second homes is set to rise from 3% to 5% from tomorrow. This increase is bound to reshape decision-making for current and prospective sellers in this bracket. These tax changes could potentially lead to a slowdown in property sales as owners now have to weigh up the cost of selling against reduced returns.
“Meanwhile, Labour’s abolition of the non-dom tax regime will bring further changes to the property market. This move will end the longstanding tax benefit for UK residents with permanent homes outside of the country who currently avoid tax on their foreign income. The removal of this regime could reduce demand for high-end properties often favoured by foreign investors. Reduced interest from wealthy international buyers may lead to a softening in prices at the luxury end of the market.
“Today’s budget has spared first-time buyers, however, with the government explicitly focusing on wealthier, older demographics. This approach aims to shield younger buyers and those entering the property market from further financial hurdles, especially given the persistent pressures of high housing costs and elevated mortgage rates.”
Simon Webb, managing director of capital markets and LiveMore, commented: “The new Budget has introduced significant changes with potential implications for older borrowers, particularly those aged 55 and over who may be considering property purchases or equity release options to support their retirement. The Chancellor’s focus on stability and growth in public finances, coupled with increased support for affordable housing, sends a clear message about the Government’s commitment to addressing long-term economic challenges. However, for those nearing or in retirement, the adjustments to Stamp Duty and Capital Gains Tax will add an extra layer of consideration when planning for later-life financial stability. These changes may lead many older borrowers to rethink their property investments or inheritance strategies, especially with additional financial pressures on second homes and buy-to-let properties.”
“Lenders now have a responsibility to offer clear, bespoke guidance to help this demographic navigate the new fiscal landscape. With the cost-of-living still impacting many over 55, a focus on providing transparent, responsive solutions will be critical in empowering older borrowers to make well-informed decisions about their financial futures amidst the evolving market dynamics. Tools like LiveMore’s Mortgage Matcher® can help intermediaries navigate the over 50 market more effectively, ensuring they find solutions that suit their specific client’s circumstances.”
John Phillips, CEO of Spicerhaart and Just Mortgages said: “Today’s Budget was an opportunity for Labour to show that its plans for housing are far more than just increasing supply. Sadly this wasn’t the case, with a real lack of support for buyers and the wider housing market. While increasing supply is necessary, we also need tangible support right now to increase routes to homeownership and reduce affordability pressures, particular for first-time buyers.
“While not mentioned, it seems the Stamp Duty relief will still end in April, removing important financial support for buyers and downsizers, while creating another cliff-edge deadline for the industry to deal with. We will have to see if the almost instant increase in stamp duty on second homes does indeed increase transactions as the Chancellor hopes, or whether as some worry, it will impact rental supply further and send rents higher – adding further pressure to those trying to save for deposits.
“With the Budget now done, we have to hope that some of the waiting and seeing will now clear and we see buyers moving forward with plans. Plus, with the consensus being that we will still see another cut to the base rate this year, we will hopefully see some activity from both lenders and potential buyers. It’s a shame though that it is left to the industry once again to do the heavy lifting to support buyers and keep the housing market moving.”
Rajan Lakhani, spokesperson at smart money app Plum: “It’s disappointing that Rachel Reeves has not addressed Lifetime ISAs in the Autumn Budget today. Penalties are hitting more and more first time buyers as house prices continue to soar. Our recent research showed that HMRC has charged some people more than £11,000 to withdraw their Lifetime ISA – a huge amount of money for any first time buyer. Most local authorities in London and 28 local authorities outside London have an average house price of above £450,000. This leaves first time buyers stuck when they finally save enough to buy their first home.
“We feel it’s high time that the situation was made fairer for first time buyers, which is why we’ve been campaigning for the Lifetime ISA limit to be raised to £600,000. It’s important to remember that an increase to this amount would only bring the limit more or less in line with house price inflation since the Lifetime ISA was launched in 2017.
“This was a missed opportunity for the Government to take a stand for the country’s young people by raising the limit, especially considering their election commitment to helping people own their first home. We’ll continue to campaign on this as it is a really important issue for our customers.”
Jon Cooper, director of mortgages at Aldermore, comments: “While it is positive that the Chancellor did not use their Budget announcement to roll back Stamp Duty relief for first-time buyers as was speculated, the choice to increase additional Stamp Duty on second homes from 3% to 5% will have an impact on our housing ecosystem.
“By placing increased pressures on landlords, there will also be increasing costs for renters, not least because we anticipate many landlords might withdraw from the market in response.
“To help repair the housing market in the UK we need to build more homes so that there is less pressure on supply; while there were steps taken in the Budget to support smaller homebuilders, until we take real action to reform planning then it will remain a challenging environment for young people looking to get on the ladder.”
Jerry Mulle, UK Managing Director of SaaS core banking provider, Ohpen: “Today’s Autumn Budget has been anxiously awaited by homeowners and prospective buyers since Labour took office. Unfortunately, it neglected to include details about the permanent mortgage guarantee scheme, promised in Labour’s manifesto, meaning uncertainty around the mortgage and housing market remains.
“Missing an opportunity to alleviate pressure for home buyers, especially for first time applicants, will add further stress to those who are already facing a challenging mortgage application process. In fact, our latest research into the current state of mortgage applications reveals that 38% of homeowning 24–35-year-olds wished they rented for longer instead of going through the mortgage application process due to how stressful it is.
“The Government has a huge role to play in alleviating stress on homebuyers, by providing clarity to schemes and delivering on manifesto promises, however, with a fifth of consumers aged 18-54 asking for better online tools to relieve stress during the mortgage application process, mortgage lenders must face the reality of the inefficiency delivered by archaic legacy systems.
“The industry doesn’t need to wait for the Government to work together to make the mortgage application process more transparent and inclusive from the outset. With a joined-up approach, the industry can speed up the application process by taking complex legacy technology out of the equation and enable better real-time data sharing between all the stakeholders involved in the home-buying journey.”
Paul Hardy, Managing Director of LSL Estate Agency Franchising: “The biggest relief is that the budget is finally over; we can stop with the speculation and get on with navigating the market. The changes announced have confirmed several rumoured amendments that will have some impact on mainly landlords and property investors. On a positive note it’s a relief that household property has been spared incremental Capital Gains Tax, which on one level suggests that the Government does have some appreciation of the value of the Private Rented Sector and on another level may persuade Landlords not to exit. However the increase in Stamp Duty on the purchase of second homes, from 3% to 5% – with immediate effect – is a real and sudden financial impact on investor landlords planning to expand their portfolios. For our estate agency franchise partners across the UK, today’s announcement is all in a day’s work; they’ve dealt with worse, and the long-term resilience of the UK housing market, coupled with strong demand for rental properties, positions the sector well to respond to the new budget measures. Ultimately, property remains a sound investment, and as long as the financial markets remain stable post-budget, the property market will keep thriving.”
Paresh Raja, CEO of Market Financial Solutions, said: “The Government had warned of tax rises to fill the black hole in public finances, so there was apprehension across the property and finance sectors heading into today’s Budget. Unlike previous budgets – think Kwarteng’s mini-budget – Reeves opted for a more measured approach, refraining from pulling any proverbial rabbits out of the hat – although the increase to the Stamp Duty surcharge on second homes was unexpected. This approach should calm the lending and property markets, easing some of the uncertainty that has lingered in the lead-up to this announcement.
“In general, the clarity offered today is certainly welcome, though we’ll need to see how these policies translate practically. While certain tax reforms may require careful consideration from investors and brokers alike, I anticipate the market will soon shift back to ‘business as usual’ – particularly as some of the tax increases were less substantial than many were expecting. This is promising, as the property sector has shown great resilience in recent months amid an improving economic outlook. Today’s steady fiscal approach should help maintain that positive momentum, provided that investors are able to navigate the more unexpected changes that have been made with confidence.
“Indeed, some of today’s announcements will undoubtedly put a slight dampener on investors’ moods. As such, it’s up to lenders and brokers to work together to provide financial products that can help them navigate the evolving market conditions with confidence in the months ahead. The property investment landscape may have shifted, but through collaboration and innovation, there’s no reason why it can’t continue to thrive in the aftermath of today’s announcements.”
Trevor Kearney, founder of The Private Office: Real Estate says: “This Budget may be a “painful” one for some corners of the economy, but for property, it’s not all doom and gloom. Non-doms are fleeing to places like Milan and Dubai, but this does not mean they’re abandoning the UK forever. They will still keep a hub in the UK and travel back and forth and the UK will continue to be the ultimate destination to do business. Interestingly, we’re seeing our clients prioritise education and good schools and the UK’s education system is second to none – that’s a huge retainer, even with the added VAT onto fees. While property won’t take the same hit as other areas of the economy, the Labour government does need to be wary of alienating non-doms and high net worth individuals from living and working in the UK. That’s where the pinch points for the economy will be felt most.
“The decision from the Chancellor to leave CGT levied on the sale of second homes and buy-to-let properties untouched is critical too. The party knows that a decision like that would cost the Treasury a lot of money, by slowing down property sales. Historically, property has always performed better under a Labour government. But for the current government not to buck the trend, property reform on areas such as stamp duty needs to be a priority. Rachel Reeves’ decision to scrap stamp duty exemptions means we’re likely to see a rush to complete property transactions before the stamp duty changes come into effect.
“Ultimately, it’s going to make the rungs on the property ladder harder for first time buyers to reach, let alone climb. While the Government need to raise money, this shouldn’t be the area to try and do it through. A policy decision like implementing stamp duty for sellers rather than buyers would not only incentivise people to buy but help many first-time buyers onto the property ladder, at a time when rental prices have reached record highs.”
John Fisher, Mortgage and Protection advisor at True Potential Wealth Management said: “Obviously the headline from a mortgage perspective is the increase in 2nd Property Stamp Duty from 3% to 5% with immediate effect. I have already had a client been in touch with an on-going case from which he is now seriously contemplating withdrawal. Long term I don’t think it will have a massive effect as I have seen the numbers of new BTL applications reduce significantly over the last few years.”
Terry Woodley, MD of Development Finance at Shawbrook, commented: “Reducing planning red tape and streamlining processes is going to play a crucial role in delivering the ambitious 1.5million new homes target. But it’s not the only answer: a multi-faceted approach is needed to really address the issues currently facing developers
“The recruitment and training of additional planners will take time, and any further planning reform remains unclear. The Government must prioritise effective, comprehensive planning overhauls to kickstart progress and unlock the UK’s full housebuilding potential.”
Paul Noble, CEO of Chetwood Bank (formerly Chetwood Financial), said that: “The property market was certainly a major focus of the Chancellor’s speech. With planning reforms and housebuilding promises, the Budget reaffirmed Labour’s manifesto pledge to tackle the UK’s housing shortage. But those are long-term strategies – in the here and now, it is the reforms to Capital Gains Tax (CGT), Stamp Duty and Inheritance Tax that will impact the market, forcing landlords and property investors to consider their plans, particularly with the Renters Reform Bill and new EPC rules already on the table.
“The mortgage industry must move quickly to adapt in line with these changes. For specialist lenders, the focus must be on supporting landlords and investors who may now want to change their business model. No doubt some landlords will alter their long-term plans in light of the tax reforms, while others will be concerned with the impact of the increase in the rates of CGT and the higher SDLT surcharge for second homes.
“It will take some time for the dust to settle from today’s Budget. But now more than ever, lenders have to combine the right products with exceptional client support. This, in turn, will allow all manner of property buyers, as well as existing property owners, to make informed decisions and execute their own plans with confidence.”
Lee Williams, National Sales Manager, Saffron for Intermediaries said: “Today’s budget offered a few, fleeting bright sparks for the mortgage market, including a £5bn push for housebuilding. Smaller builders are also getting some much-needed support with £3bn of support for SMEs and the Build to Rent sector. Yet, with housing only briefly touched on, you have to wonder if these steps will be enough to hit that ambitious 1.5 million homes goal, or make housing truly affordable.
“It is, however, encouraging to hear that the Government will debate making the mortgage guarantee scheme a permanent fixture with industry in the coming months, which would provide much-needed long-term support for borrowers and stimulus for lenders.
“To make real progress on affordability, though, we’d love to see the Government lean into initiatives that back higher loan-to-income lending. Many people could handle a mortgage if they were assessed on what they’re already paying in rent, and that could go a long way in opening doors for buyers.
“For landlords, the decision to hike the stamp duty surcharge to 5% for second-home buyers is going to hit hard. While residential property was left untouched by the increase to capital gains tax, for landlords with smaller portfolios, buy-to-let is starting to feel less worthwhile. In a housing ecosystem already strained with rental availability (currently a fifth lower than the pre-pandemic level), this stamp duty increase could squeeze out non-professional landlords, reducing the supply of rental homes and in turn, driving up average rents. If we’re serious about affordability, supporting these landlords is essential. With all these changes, seeking advice from brokers has never been more important for homebuyers.”
Rachel Reeves has announced £5bn for housebuilding, but who’s going to build them asks Fix Radio’s Clive Holland as he comments:
“ A recent report has said we need 1.3 million extra skilled tradespeople and 350,000 new apprentices within the next decade to reach housing targets. The Budget did not outline how the country will address the skills deficit, and the hiring of new apprentices to our industry.
“There was also little to combat the increase in reports of shoddy new-build homes is not only staggering but embarrassing and something to be ashamed of. The drive to build these homes has become a game of brinkmanship without consideration for the environment and impact on people. It’s now a case of, if there is spare land, let’s build on it.
“This is a dangerous game to play with the increased flood risk etc. As for ‘quality tradespeople’ to build them, there is not enough. The government will try the ‘fast-track’ approach to get inexperienced people to get qualified just so they can show off their ability to meet a housing target that no previous government has achieved. Over the upcoming five-year term, I believe we will look back and will have to ‘wake-up and smell the debris’ of the poorest house builds ever! The real scandal in this country is the 500,000 empty properties that could be repurposed for affordable housing.”
