Autumn Budget 2026: What does it mean for the property market and mortgages?

by Aaron Strutt

Oct 28 2026

The Autumn Budget 2026 brings a mixed picture for the property market. First-time buyers have been offered additional support, while landlords face higher tax on rental income and owners of expensive homes still need to prepare for the forthcoming council tax surcharge.

For anyone buying, moving or remortgaging, the important question is how these announcements affect their finances. Government assistance may help some borrowers overcome deposit barriers, but mortgage affordability, property prices and ongoing ownership costs remain central to any decision.

Banks will pay more tax on their profits with a rise from 3% to 6% for 15 months, starting in January.

First-time buyers receive a new route onto the ladder

The government has confirmed £4.7 billion for Your First Home, with £700 million allocated in 2027 to 2028 and £1 billion in each subsequent year. The equity loan scheme is intended to support first-time buyers in England. It will offer government equity loans of up to 20%, with deposits starting at 2.5% and a five-year interest-free period. 

The scheme is expected to open for applications in February 2027. More information about eligible homes, participating developers and lenders, and how to apply will be published before applications open.

The scheme targets qualifying new-build purchases. It could help buyers who can manage monthly repayments but struggle to save a substantial deposit while paying rent. However, an equity loan is borrowing, and buyers need to understand the future costs and repayment obligations alongside their mortgage. First-time buyers can also access very low- or no-deposit mortgages at the moment.

For the property market, we expect this to increase demand for eligible new homes. Its effect on existing properties may be less direct, although greater buyer activity can support confidence more widely.

London buyers must check the limits

Your First Home includes household income caps of £140,000 in London and £110,000 elsewhere. Property price caps are £650,000 in inner London and £500,000 in outer London, with limits elsewhere based on local authority median prices.

These restrictions matter. A household may qualify on income but find that its preferred property exceeds the relevant cap. Buyers should establish eligibility before reserving a home or paying fees. Once the scheme launches, Trinity Financial's broker should be able to access the mortgage lenders accepting it. 

The announcement also gives developers an opportunity to attract buyers with smaller deposits. Whether it produces additional transactions will depend on suitable homes being available, participating lenders and buyers passing affordability checks.

Who the Your First Home scheme is for:

• be a first-time buyer
• buy a new-build home in England, within the relevant local price cap
• use the property as their main home
• have a total annual household income of £110,000 or less outside London, or £140,000 or less within London
• be able to obtain a mortgage from a participating lender

Lifetime ISA changes help buyers above £450,000

Eligible Lifetime ISA withdrawals for first-home purchases above £450,000 attract a reduced withdrawal charge of 20%, rather than 25%.

This is particularly relevant in expensive areas where a suitable first home can exceed the existing price cap. The change removes the additional penalty on original contributions in a straightforward example, although the government bonus is effectively recovered.

Buyers should check the qualifying conditions with their conveyancer and provider before arranging a withdrawal.

Landlords face higher tax on rental income

From April 2027, the announced property income tax rates will be 24%, 44% and 49% for basic, higher and additional rate taxpayers and property trust rate respectively in England, Wales and Northern Ireland, subject to the relevant devolved arrangements.

These figures include a further two percentage point increase beyond the rises previously announced. They concern taxable property income, rather than a flat charge on every pound of rent collected.

For landlords already managing mortgage payments, maintenance, insurance and periods without tenants, the practical implication is tighter cash flow.

Our assessment is that more property investors may reconsider purchases or review less profitable properties and sell them. Others may prioritise refinancing, reducing borrowing costs or purchase/refinance on a limited company buy-to-let basis. Outcomes will vary considerably across portfolios.

Will the Budget push rents higher?

Higher landlord taxation could increase pressure to raise rents where local conditions allow. However, rent increases are not an automatic consequence of a Budget announcement.

Tenant affordability, competing properties and local demand all influence achievable rents. Some landlords may absorb part of the extra cost, while others could sell.

If rental supply falls without a matching reduction in tenant demand, competition for available homes could intensify. Conversely, properties sold to owner-occupiers may create opportunities for buyers. Trinity Financial brokers have been consistently arranging mortgages for tenants buying the property they rent directly from their landlords.

Almost three-quarters of landlords failed to secure their proposed rent increase in full in tribunal cases decided in September, according to analysis from Cyborg Finance.

The firm reviewed 74 First-tier Tribunal decisions in England and found that 71.6% resulted in a smaller increase than requested, no change, a rent reduction or the case being struck out

Expensive homes still face the council tax surcharge

The High Value Council Tax Surcharge (HVCTS) remains scheduled for April 2028, affecting residential properties in England valued at £2 million or more using 2026 valuations. The new charge applies to owners of residential property in England worth £2 million or more in 2026.

Guidance on the UK Government website says under the current system, a band D property in Darlington or Blackpool, today worth around £400,000, pays £2,400 to £2,600 annually. A band H property in Mayfair valued at £10m in pays around £2,100. The HVCTS is designed to address the largest inequalities in the Council Tax system by ensuring owners of the most valuable properties pay a fairer share.

Although previously announced, it remains relevant to buyers considering expensive homes. This Budget also set out further arrangements covering deferrals, discounts, exemptions and long-term empty properties. For buyers in London and other expensive locations, future annual ownership costs deserve attention alongside the purchase price and mortgage.

No broad stamp duty cut for home movers

There was no general reduction in residential Stamp Duty Land Tax rates for ordinary home purchases, even though there were strong calls to modernise the system. 

Buyers should calculate their expected tax bill early, particularly where additional-property or non-resident rules may apply.

Without broad transaction-tax relief, households still need to weigh the benefits of moving against legal fees, selling costs, stamp duty and their next mortgage payment. That could continue to encourage some owners to improve their existing home instead.

Will mortgage rates fall after the Budget?

The Budget does not directly set mortgage rates. Fixed-rate pricing reflects wholesale funding costs, interest-rate expectations, and lender competition. 

US voters head to the polls in midterm elections that will shape the rest of Trump's presidency, and the results will indicate voter sentiment in the US. This matters because our mortgage and borrowing costs have increased, particularly since the war in Iran started.

Budget "Underpinned by fiscal discipline" 

In the Government's Budget press release, it said "Underpinning every measure in this Budget is a commitment to fiscal discipline. By meeting the fiscal rules and maintaining a buffer against uncertainty, the Government is providing the stability that families, businesses and investors need.  

"The stability rule is met with £15 billion of headroom in 2029-30, meaning day-to-day spending is fully funded and borrowing is reserved for investment. Headroom is £9 billion lower than in March, more than accounted for by the conflict’s impact on debt interest costs. Headroom rises again to £22 billion in 2030-31, which will be the target year at the next Budget."

Speak to a Trinity Financial adviser today

The mortgage market moves fast — and the right advice can make a significant difference to the rate and deal you secure. Get in touch with our team to discuss your options.

Call Trinity Financial on 020 7016 0790 to secure a fixed or tracker rate mortgage, book a consultation, or use our appointment calendar

The information contained within was correct at the time of publication but is subject to change. It is for general information purposes and is not advice.

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