Budget 2025: What It Means for Homebuyers, Homeowners & Landlords
The Chancellor’s Budget this year focuses on raising money for the country rather than boosting the housing market. There are no new schemes for buyers, no stamp duty cuts, and no support aimed directly at mortgages.
Even so, several changes will have an impact on anyone who owns property or plans to buy in the future. Below is an easy-to-read summary of what has changed, and what it means for you.
Stamp Duty Stays the Same
The Government has chosen not to make any changes to Stamp Duty.
What this means:
- Staying put continues to be more cost-effective than moving frequently.
- Buying a home remains expensive, especially for first-time buyers and families looking to move.
- High-value purchases still carry significant upfront tax.
A New “Mansion Tax” for Homes Over £2 Million (from 2028)
From April 2028, properties worth over £2 million will have a new annual tax. Think of it as an extra council tax for very high-value homes.
What this means:
- Households with larger mortgages will feel the impact more than cash buyers.
- Buyers may budget slightly differently when looking at homes around the £2m–£3m range.
- Lenders are likely to include this annual cost when checking affordability.
Higher Taxes for Landlords Who Own Property in Their Own Name
From 2027, rental income earned personally (not through a company) will be taxed at higher rates, and landlords will no longer get full tax relief on mortgage interest.
What this means for landlords who own properties personally:
- Rental profits will fall.
- Heavily mortgaged properties may become less attractive.
- Some landlords may choose to sell.
- Rents could rise if there is less rental stock available.
For landlords using a Limited Company (SPV):
- Company tax rules stay the same, so this remains the more tax-efficient route.
- However, taking money out of the company (dividends) will cost more.
Frozen Tax Bands Until 2031: Quietly Reducing Borrowing Power
Even though incomes will rise over time, tax thresholds will stay exactly where they are until 2031. This is known as “fiscal drag”.
What this means for borrowers:
- People will pay more tax as their income increases.
- Take-home pay (net income) won’t grow as quickly.
- This can reduce mortgage borrowing capacity over time.
In short: getting a pay rise doesn’t stretch as far as it used to.
Changes to ISAs and Savings: Slower Deposit Building
From 2027:
- You will pay more tax on savings.
- The cash ISA allowance for adults under 65 will drop to £12,000 per year.
What this means:
- It may take longer for first-time buyers to save a deposit.
- More young buyers may rely on family support.
- Saving efficiently will become more important.
Looking Ahead: What Should You Do Now?
If you are a homeowner or planning to move:
- Review your long-term mortgage plans, especially if buying above £2m.
- Consider how your income and tax position may change over the next few years.
If you are a landlord:
- Review whether your properties are better held personally or in a company.
- Check that your portfolio still works financially once the new taxes arrive.
- Consider adjusting loan levels or selling weaker-performing properties.
If you are a first-time buyer:
- Plan your deposit strategy early.
- Use the savings allowances available to you as efficiently as possible.