The Chancellor of the Exchequer, Rachel Reeves, delivered her highly anticipated Autumn Budget on November 26, 2025. Prior to Budget Day, rumours were swirling about what Reeves might announce and what it might mean for people’s finances. As ever, the Budget set out changes across a range of economic issues, from savings and taxes to welfare spending, pensions, and much more. Of course, we’re only interested in what November’s Budget announcement means for homes and mortgages. Read on for the lowdown.
What Happened In The Budget?
Earlier in November, our Doctors Mortgages Online team shared their predictions about what Rachel Reeves might have said in her Budget statement. We predicted that there might be big changes made to stamp duty, council tax, capital gains tax, and rental income. How accurate were we? Well, thankfully, we were way off with some of our guesses, like stamp duty and capital gains tax, and a little warmer with some others. Luckily, the Budget doesn’t look like it’s been too damaging for homeowners, prospective buyers, and movers. However, here are the key takeaways impacting homes and mortgages.
- Landlords Will Be Taxed More
In our predictions, our team speculated that there could be changes to how rental income is taxed. The Chancellor has decided to raise the basic, higher, and additional property income tax rate from April 2027 by 2%. This will mean landlords will now pay 22%, 42%, and 47%, respectively. Rental income is taxed after any mortgage payments have been made, so this increase will decrease any net returns that landlords receive. This could result in landlords raising rents to plug this gap in income.
- Mansion Tax
It’s not just landlords who have been hit by more taxes. We predicted this one. Kind of. Those who own a home that’s worth £2million or more will be subject to an annual surcharge in addition to their council tax payments. Coming into effect from 2028, the ‘mansion tax’ will have the following repercussions for homeowners:
- Homes worth £2.0-2.5 million – £2,500 annual surcharge
- Homes worth £2.5-3.5 million – £3,500 annual surcharge
- Homes worth £3.5-5.0 million – £5,000 annual surcharge
- Homes worth £5million and above – £7,500 annual surcharge
This could see people in areas like London, where house prices soar, being slapped by hefty additional bills.
- Income Tax Freeze
The Chancellor announced that Labour will be freezing income tax thresholds until the 2030-31 tax year. This means that income tax thresholds will not be increased in line with inflation. Freezing income tax thresholds means that when people get pay rises, they will be pushed into the higher tax bands compared to if the thresholds were increased to match inflation. This means people will take home less extra earnings than they might expect. When it comes to mortgage borrowing power, you won’t be able to borrow as much as your affordability will be affected, as you pay more tax and have less take-home pay.
- Cash ISAs
Now, this wasn’t the best news for savers, including those who might be saving for a house deposit. The Chancellor is reducing the amount people can save in cash ISAs from £20,000 to £12,000 per year from April 2027. People can still save £20,000 overall; they just need to place the remaining £8,000 in stocks and shares ISAs. This could have a knock-on effect on how much people might be able to save towards a house deposit if they prefer to save through a cash ISA. This could mean that ownership takes longer, or potential buyers don’t have access to preferential rates due to having to fund higher deposits.
What Do These Announcements Mean For The Housing Market and Mortgages?
Overall, it seems that Rachel Reeves’ Autumn 2025 Budget has been relatively uneventful as far as mortgages are concerned. Despite all the rumours, it seems that the majority of average homeowners have been saved from increased taxes, and homebuyers aren’t about to be hit with a rise in stamp duty, which is good for the property market too. Mortgage rates are already dropping, slowly but surely, and hopefully, there is nothing in this most recent Budget that could put an end to this welcome downward trend for borrowers.
While the fallout from the Budget for average homeowners and buyers might seem minimal, the same cannot be said for Freddo prices! The popular miniature chocolate bar loved by so many has risen astronomically over the years, from just 10p in the 1990s up to a whopping 35p in some places today*. That’s an eye-watering 250% increase. Only time will tell what’s next for mortgages, house prices, and indeed, the cost of a Freddo!
