Interest rates cut again as budget uncertainty finally eases

We can all breathe a sigh of relief now the budget uncertainty is behind us and interest rates have been cut again says Enzo Mora CEO and founder of The Mortgage Brain.

As with all budgets there are winners and losers in the housing market and always some regrets about what didn’t get announced. Stamp Duty, which boosted the government’s coffers by £13.9bn in 2024/25, compared to £11.6bn in the previous year, will stay the same. The key change is a new annual tax on houses worth over £2m, affecting 0.5% of homes, to be introduced in April 2028. The threat of it applying to homes over £500,000, around a quarter of all UK sales listings according to Zoopla, has gone. Lender Nationwide has said that the budget property taxes are unlikely to have a significant impact on the housing market and I see this as a green light for buyers and sellers to waste no time to get a move underway.

Mortgage lending still strong

Mortgage lending continued throughout the pre-budget blues with HMRC’s latest figures showing98,450 residential property transactions in October, 2% lower than October 2024 and 2% higher than September 2025. UK Finance revealed that mortgage lending activity returned to growth in Q3, following a quieter second quarter caused by many transactions having been brought forward ahead of Stamp Duty changes in April. Refinancing also increased, with volumes up nearly 50 per cent yearonyear as more customers rolled off fixedrate deals.

Moving costs rise

We not only help our customers find the best mortgages but we also remind them about all the other moving costs they will incur so they can make sure they have the funds available, whether that’s saving up before the move or, if they are lucky, getting a loan or gift from the bank of Mum and Dad. Reallymoving’s annual Cost of Moving Report shows that it now costs a record £17,831 in upfront expenses to move on a property costing £395,000 covering Stamp Duty, estate agent’s buying and selling fees, conveyancing, surveying and removal costs and getting an EPC. That’s 27% more than last year. First time buyers purchasing a property at £253,800, will find the costs are 6.5% higher than2024 and add up to £2,315 – there is no stamp duty to pay up on properties up to £300,000 for first purchases. There continues to be a sharp north/south divide with homeowners in the North East, paying £8,010 to move home. In Yorkshire & Humber (£11,500) and the North West (£11,920), movers are much less burdened by Stamp Duty bills due to lower house prices.

Affordability hits record high

The typical first-time buyer property price is now 5.9 times average earnings, down from 6.2 last year says new research from Lloyds. Based on a property costing £237,518, up 2.4% over the last year, average incomes are up by 6.2% to £40,021, the lowest ratio since 2015. As a new build specialist broker, we’ve identified lenders ending the year on a positive note. Barclays now allows 95% loan to value (LTV) on new houses and increased salary multiples to 6x income for earners over £75,000.HSBC’s income multiple is 6.5x at 90% LTV for customers earning over £100,000 while NatWest has increased LTV limits to 85% for new houses and 90% to flats. Aldermore has also increased maximum income multiples to 6x for earners over £60,000 at 80% LTV. And the good news we’ve ended the year with a bank interest rate cut