Budget 2025: What it means for homeowners, landlords and expat investors

The Chancellor’s latest Budget was one of those moments where the property market paused to take stock. For weeks, speculation swirled around potential changes to stamp duty, landlord taxation, and wider fiscal measures. As the details emerged, the picture became clearer: no immediate shocks for movers, but significant changes on the horizon for landlords and high-value homeowners.

Markets react calmly 

Initial reaction from financial markets was broadly positive. Sterling saw a modest uptick, swap rates dipped slightly, and the expectation is high of a base rate cut to 3.75% in December or early next year. The outlook for mortgage affordability appears brighter as we head into 2026, signalling a period of relative stability after weeks of uncertainty for brokers and borrowers alike.  

A slowdown before the showdown 

Skipton International, like many lenders and brokers, saw a slowdown in mortgage applications in the run-up to the Budget after a busy summer and early autumn period. This is typical when buyers and investors wait to see if major fiscal changes will impact their plans. Now that the dust has settled, confidence should return - particularly with no changes to stamp duty, which means movers can proceed without unexpected transaction costs. 

Landlord tax changes: Planning ahead 

The most significant property-related measure is the increase in income tax on rental income from April 2027. Rates will rise by two percent, taking basic, higher, and additional property income tax rates to 22%, 42%, and 47%. 

For landlords, this means tighter margins. Some may choose to increase rents to offset costs, while others could reassess their portfolios entirely. Smaller landlords or those with low rental yields may find it harder to make the numbers work.  

One option landlords and expat investors are increasingly using is a Special Purpose Vehicle (SPV) - a limited company structure for holding property investments. SPVs can offer potential tax advantages, such as paying corporation tax instead of personal income tax on rental profits and may provide more flexibility for portfolio growth. However, they come with additional costs and compliance requirements, so professional advice is essential before making the switch. 

While UK Finance data shows landlords are still investing and remortgaging, the road ahead will require careful planning. For expats considering UK buy-to-let, understanding these future tax implications is essential before committing to new investments. 

Council tax surcharge for high-value homes 

From 2028, homes worth more than £2 million will attract an annual council tax surcharge. While this affects a small segment of the market, it is another consideration for high-net-worth buyers and those investing in prime property. 

What this means for intermediaries 

For intermediaries, the Budget reinforces the importance of proactive client conversations. With tax changes some years away, there is time for landlords and investors to plan - but they will need guidance on structuring portfolios, managing yields, and securing competitive mortgage products in a changing environment. 

Skipton International’s outlook 

With an interest rate cut on the horizon, Skipton will be reviewing its mortgage rates to ensure competitive options for homeowners, landlords, and first-time buyers. New rates are coming soon, and we will continue to support intermediaries and clients with clear guidance during this period of change. 

Speak to your intermediary or contact us today to explore your mortgage options.