Okay, so it’s finally happened. One of the most widely anticipated (and possibly dreaded) budgets has taken place and everyone – including our team of Guildford mortgage brokers – now knows where they are.
But exactly how does the budget affect mortgages? Let’s take a look.
1. Larger costs for owners of larger properties
The so-called Mansion Tax has arrived – well, it will have from April 2028. This means that those with properties worth over £2m will face a surcharge on their council tax. For properties worth £2m – £2.5m, homeowners will pay an additional £2,500. Those with properties worth over £5m will face a staggering £7,500 surcharge.
Whilst this is very clearly a tax, it has the potential to radically change the way high-value mortgages are approved. For Surrey, where there are a substantial number of properties within the over-£2m profile, this is big news. Affordability criteria is likely to change and our team of Surrey mortgage advisers suspect that lenders may become more cautious, but this remains to be seen.
2. Tighter squeeze for landlords
As a Guildford buy to let mortgage broker, our clients regularly tell us that being a landlord has become increasingly difficult – and it’s not difficult to see why. From tighter legislation to the recently passed Renters’ Reform, things have undoubtedly become more challenging for landlords. Sadly, the Chancellor’s announcement has only compounded this.
From 2027, landlords will face an additional 2% tax on rental income. Our team of Surrey mortgage brokers are already gearing up for a rise in limited company buy to let mortgage applications. We also expect an increase in requests for consultations from our existing base of buy to let mortgage clients, who are likely to want clarity on how they can continue to make being a landlord work.
3. Status quo for Stamp Duty
Amongst some of the less palatable changes levied by the Chancellor, there was some good news – and that was mainly in relation to Stamp Duty Land Tax (SDLT), which, despite much speculation, remains unchanged. As people widely expected major SDLT reform in the runup to the Autumn Budget, demand for property dwindled – something that our team of mortgage brokers in Guildford certainly felt.
However, now that there are no rising costs in the context of SDLT, demand for property – and therefore demand for mortgages – will spike over the next few months. As a result, we would advise people thinking about applying for a mortgage to do so this side of Christmas in order to beat the inevitable post-Christmas rush.
Thinking about applying for a mortgage before Christmas? Contact our team of Surrey mortgage advisers on 01483 238280 or by e-mailing info@complete-mortgages.co.uk.
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