The UK Budget 2025 has introduced several measures that could shape the property and mortgage landscape in the years ahead. While mortgage interest rates are still driven by the wider economic environment rather than the Budget itself, the government’s latest announcements will influence buyers, landlords, and homeowners planning their next move.
This article breaks down the most important UK Budget 2025 mortgage takeaways, what they mean for you, and how you can prepare.
Key Budget Changes That Impact Mortgages
1. No Change to Stamp Duty – but a Mansion Tax Is Coming
Despite speculation, the government did not change Stamp Duty.
However, for properties valued at £2 million or more, a new High-Value Property Surcharge (often referred to as a “mansion tax”) will come into effect.
What this means for you:
If you’re purchasing a high-value home, long-term affordability will now need to include this new annual tax in addition to your mortgage repayments.
2. Landlords Facing Higher Tax on Rental Income
Landlords will see a 2% increase in property income tax. This affects basic, higher, and additional rate taxpayers.
Impact:
- Lower net rental profits
- Potential upward pressure on rents
- Possible shift in buy-to-let investment strategy
If you’re a landlord with a mortgage, this could affect your overall affordability and long-term viability of rental properties.
3. Mortgage Rates Still Driven by the Economy, Not the Budget
The Budget didn’t directly change mortgage interest rates. These remain influenced by:
- Inflation
- Bank of England base rate
- Lender risk appetite
- Borrower affordability trends
However, the Budget’s wider economic measures signal stable growth, which may support a steadier mortgage market over the coming years.
4. Housing Market Forecast Shows Gradual Price Growth
Government forecasts predict house prices will rise slowly in the coming years.
This can impact:
- First-time buyers trying to enter the market
- Homeowners planning to move or remortgage
- Investors reviewing yield calculations
This steady growth offers more predictability-but affordability remains crucial.
What This Means for Homeowners and Buyers
If you’re buying a home under £2M:
You’ll likely see minimal direct impact from the Budget. Standard mortgage affordability rules still apply.
If you’re buying a high-value home (£2M+):
Start planning now for the upcoming mansion tax and how it affects your long-term budget.
If you’re a landlord:
Your tax bill could rise. Review your mortgage, yields, and portfolio strategy to ensure sustainability.
For all buyers and homeowners:
Now more than ever, careful affordability planning is essential.
Your home may be repossessed if you do not keep up with your mortgage repayments.
If you’re buying, remortgaging, or reviewing your property portfolio, now is the perfect time to speak with a qualified mortgage adviser. The right advice can help you navigate new tax changes, understand your affordability, and secure the most suitable mortgage deal.
Want help connecting with a trusted mortgage adviser or need a personalised breakdown of how the 2025 Budget affects your situation?
Just let me know — I’m here to help.
Emily's Mortgage Services LTD 