The Chancellor needs to raise funds - and both lenders and homeowners are in the firing line
Chancellor Rachel Reeves is set to present the UK’s annual budget on Nov. 26, the Treasury has announced on Wednesday.
The late timing of the announcement leaves mortgage lenders, brokers, and homeowners with little time to prepare for possible tax changes before the new financial year begins in April.
The Chancellor @RachelReevesMP has commissioned the @OBR_UK to prepare an economic and fiscal forecast to be presented to @UKParliament alongside the Budget on 26 November 2025. pic.twitter.com/u3STOrS3NQ
— HM Treasury (@hmtreasury) September 3, 2025
Reeves faces significant fiscal pressures as she prepares her first budget. Recent analysis by Capital Economics indicates that Reeves may need to raise between £18 billion and £28 billion to return to the fiscal position held in March and adhere to her own rules, which require that routine government spending be funded by tax receipts within five years.
Economists have warned that a funding gap of up to £51 billion may need to be filled through a combination of tax rises and spending cuts. The Office for Budget Responsibility will confirm the precise figure in its forecasts ahead of the budget.
“We must bring inflation and borrowing costs down by keeping a tight grip on day to day spending through our non-negotiable fiscal rules,” Reeves said. “It’s only by doing this can we afford to do the things we want to do.”
“Britain’s economy isn’t broken, but I know it’s not working well enough for working people. Bills are high. Getting ahead feels tougher. You put more in, get less out. That has to change.”
This government will build an economy that works for working people, and rewards working people. pic.twitter.com/lAPR7RvX5Y
— Rachel Reeves (@RachelReevesMP) September 3, 2025
Among the tax proposals reportedly under consideration are a major revision of stamp duty, which could see a new national property tax on homes valued over £500,000; changes to inheritance tax; and the possible extension of national insurance contributions to rental income. These measures are being examined as the government seeks to address a substantial public finance shortfall.
However, the late November announcement has prompted concerns among mortgage professionals and other industry stakeholders about the short window to adjust to any new measures.
For Jonathan Stinton (pictured right), head of mortgage relations at Coventry Building Society, “drip feeding policy ideas months ahead of time is unhelpful for everyone.”
“What the housing market needs most right now is clarity,” he stressed. “There are very real consequences of all this speculation – it leaves people guessing, and the housing market doesn’t really thrive on guesswork. Treasury should either quash the rumours or set out the detail, so buyers, sellers and the market know what to prepare for.
“Until these rumours are either quashed or implemented, it’s going to be a frustrating time for people who just want to move home. Ten weeks is a long time to wait to find out if these changes are real. When tax reforms of this scale come in, there are always winners and losers – the Treasury can’t expect anyone to carry on as usual when thousands of pounds could be at stake.”
Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.
