This year’s Budget was quieter than expected for housing, but it delivered something more valuable: Clarity. With speculation finally over and some economic forecasts improving, homeowners, buyers and landlords now have a clearer view of the year ahead.
A Stable Outlook, Driven by Falling Rates
One of the most important developments wasn’t a policy change, it was the economic forecast. Inflation is easing, mortgage rates have fallen five times since August 2024, and another quarter point reduction is expected in December.
For buyers, movers and remortgagees, this means improving affordability and growing confidence.
Mansion Tax: Minimal Local Impact
The new annual charge on properties valued over £2 million begins in April 2028. Charges range from £2,500 to £7,500, depending on value.
Simon, Richard and Dan all agree the effect locally will be limited:
• Very few homes in our area exceed £2m
• It won’t restrict normal market activity
• It’s seen as a fairer contribution based on property value
Rental Income Tax: Pressure, But Yields Still Strong
The 2% tax increase on rental, savings and dividend income will affect landlords, but strong demand and rising rents continue to support yields.
As Simon Croft notes: “The increase may result in a few more landlords pulling out of the rental market. This will further reduce supply of rental property and, with demand ever increasing, rental income and therefore yields will rise, meaning property should still prove to be a very good investment, more than compensating for the 2% tax increase.”
Perspective from Our Homeowning Expert, Andrew Milnes
"For buyers, movers, and those re mortgaging, the most exciting news isn't a new policy at all - it’s the economic forecast. The prediction that inflation is finally on its way down is a further signal to the Bank of England to continue gradually lowering the base rate.
The Government's ongoing investment in planning should be acknowledged, but the proof will be in the pudding when it comes to meeting its target of 1.5 million new homes which seems a long way away at the moment.
Despite this, I do feel the government missed some crucial chances to make buying and selling easier, such as a long overdue reform of Stamp Duty and fully overhauling Council Tax.”
The Key Takeaway
This Budget won’t reshape the housing market, but it does provide some stability. With inflation easing and interest rates gradually falling, the next year looks more predictable. Indeed we are already noting increased enquiries and viewings post Budget.
For anyone considering a move, reviewing their mortgage, or assessing investment plans, this is a sensible time to seek informed advice.
If you’d like guidance based on your situation, you can reach us on 01423 501211.