Autumn Budget 2025 Predictions: Mortgage Market

The chancellor will deliver her second budget this autumn. Due to slow economic growth and high inflation, the government need to manage a £40 billion shortfall in public finances. There have already been reports about changes to taxes, including income tax and capital gains tax.

  1. National insurance could be charged on property income
    Currently, national insurance (NI) contributions aren’t charged on property, savings, or pension. However, the chancellor has suggested landlords may have to pay NI on income received from their property.

    This won’t be shown as a rate increase, but as an expansion of the tax base. This idea is under consideration as the Treasury has calculated it could raise around £3 billion per annum.

  2.  Stamp duty could be replaced with 'property tax'
    The idea to abolish stamp duty and replaced with a national proportional ‘property tax’ on homes has been talked about.

    Property tax would be paid by owner-occupiers on houses worth over £500,000 when selling up. The amount charged will be calculated by the value of the property, with the rate being determined by the central government. Stamp duty on second home would remain the same.

  3. Possible limit to principal-residence capital gains tax for higher-value homes
    The capital gains tax system raised £13.3 billion in 2024. Getting rid of an exemption for high-value homes could deter equity-rich homeowners from moving, particularly in high-price areas such as London and the South East. This would have a knock-on effect by lengthening chains with high loan-to-value movers having fewer options.

  4. Council tax could be replaced with a local property tax
    This has been mentioned, but it is a long-term plan, and may only take place if Labour wins the next election.

  5. Special levy on large lenders or amendments to bank surcharges
    An extra charge on banks could mean some banks/lenders could be more risk-averse, withdraw certain products, and cut mortgage rates more slowly.

  6. VAT threshold increase suggested to support smaller businesses grow
    There have been conversations around increasing the VAT registration threshold to over £90,000, which it is currently. There has been negative feedback that the current threshold is stopping small businesses from expanding. There are arguments that a higher threshold could help small firms, including trades that support housing activity, which will in turn assist the home-improvement market that supports further-advance lending. 

The date for the Autumn budget has not been officially set, but is likely to be around late October/early November.

Recent posts

The chancellor has advised that landlords could have another tax to pay this autumn as the Treasury decide whether to extend national insurance contributions to rental income. 

According to a report in the Guardian, senior ministers have asked Treasury officials to look into a “proportional” property tax to see how it would work as an alternative to the existing stamp duty land tax on owner-occupied homes. 

More than a quarter of UK adults in long-term relationships (26%) have reported that despite living together, they keep their finances separate from one another.

There has been a rise in both rent and mortgage costs over the last three years, with renters seeing a greater increase in their monthly payments than those with a mortgaged property.

The new Delayed Start Mortgage launched by Skipton Building Society allows first time buyers to postpone the first three mortgage payments. This product has been designed to help soften the blow of moving in costs for first time buyers. 

Mortgage lenders are starting to recognise their “Green” responsibilities when it comes to the different products they offer. 

A recent study by Boon Brokers where 1,000 people who had used an estate agent over the last year were surveyed, showed that a whopping 52% said they were pressured into using the estate agents’ in-house mortgage broker.

Analysts are predicting further rate cuts this year, with the next one possibly coming down to 4% when the Bank of England’s Monetary Policy Committee meet on Thursday 7th August 2025.