Three weeks on from the Budget, the dust has settled but concerns remain

Bob Hunt

18 December 2025

Almost three weeks on from the Budget and it feels like the right time to take stock.

The heat of the moment has eased, yet I am still left with one clear thought: the lead-up to the speech caused more harm than the content itself.

The steady drip of hints, policy rumours and off-the-record chats to journalists about potential, and major, stamp duty changes was baffling.

Stamp duty is one of the most sensitive taxes for our market. It shapes behaviour fast. If buyers think a change might be coming, the only rational thing is to wait. So, they did.

From late summer through to the end of November, the market paused. Not because of rates. Not because of stock. But because the government allowed rumour to run unchecked. Indeed, they were the source of it. It was avoidable. It slowed activity. It hit firms during a key period.

And given that the Budget eventually delivered no real shift on stamp duty, the whole approach looks even more odd. I can accept this may still be a government bedding in, but the lesson should be clear.

Speculation about major housing taxes has a cost. Senior, junior, or any Treasury/government figures should resist the urge to test ideas through the press.

Our market reacts at once, and it takes time to get going again.
 

‘Mansion tax’ was the Budget headline

As for what we did get, the move towards a form of mansion tax – wrapped as a high-value council tax surcharge – is clearly the headline. It will touch only a small group for now, but I cannot help thinking this is step one.

The threshold may sit at £2m today, yet can we see it staying there? Future Budgets will need funds. Once you set up this kind of system, it becomes simple to move the boundaries. There is also a real risk that homes near the line will sit in a strange space.

Sellers will want to show they are just under. Buyers may push back if they think the value tips them into a higher band. We have been here before with stamp duty. The whole point of reshaping the thresholds years ago was to remove these steep jumps. Now we have one back.

This is why I think the surcharge is likely the start of a wider move towards annual property taxes linked to value. Other countries do it. The push for more income from our housing stock seems clear. If this first step is seen as smooth and trouble-free, then I would expect more to follow.
 

Property income tax rise could cause shift to limited company

The other point worth noting is the 2% rise in property income tax from 2027. It sits some way off but it adds to the sense that holding buy to lets (BTLs) in one’s own name is less and less attractive.

Were it not for the stamp duty cost of shifting a home from an individual name to a company, I think many landlords would have done so already.

Instead, we see a slow move rather than a wave.

Over time, though, I expect more landlords will think the shift is worth the cost. For advisers, this means more complex conversations and more conversations about the overall implications of not moving to limited company.

Budget uncertainty has lifted

Strangely, the Budget might be remembered not for what was in it, but what was missing.

No stamp duty change. No surprise move on first-time buyers. No new Help to Buy replacement. And given the hype that came before, that in itself is notable.

But at least it has come and gone.

The shadow it cast over the second half of the year has lifted. December is often a mixed month, but early signs are holding up. My view is that 2026 has the chance to be a strong year. If we see a cut in the base rate before Christmas, as some expect, that may give things a further lift.

We also should not forget the large remortgage pool. Plenty of borrowers will need help over the next 12-18 months. Rate cuts will help sentiment, but borrowers still need steady advice as they work through their options.

There is room for advisers to gain ground here, as long as they remain close to clients and make sure those clients see them as the first stop. Lenders will undoubtedly ramp up their attempts to drag more existing borrowers down their direct channels. The Budget may be done, but lender tactics will shape next year just as much as what it did or didn’t include.

We also wait for the Financial Conduct Authority’s (FCA’s) consultation following the Discussion Paper. The regulator has confirmed this will come next year.

There is always the chance of unwelcome twist(s) emanating from this paper. Will it give the larger mainstream lenders further succour to ignore the value of advice via their marketing routes to existing borrowers? Will it proffer artificial intelligence (AI)-related offerings as a strong alternative to advice? Will it mean a combined mainstream and later life qualification for all to take?

We shall see. Advisers should keep these points in mind as they plan for next year.

For now, though, I think we can look at 2026 with a fair amount of calm. The noise of the past few months has eased. Rates have been coming down, based on a falling base rate and lower swaps. Buyers who paused should re-enter. Landlords will keep reviewing their setups.

And advisers who stay active with clients will see the benefit. Uncertainty has lifted, and that in itself is a step forward for the whole market.