Policy shifts now have greater impact than affordability or rates, survey finds
Uncertainty surrounding government housing and tax policy has become the leading external concern for homebuyers, according to new research from Nottingham Building Society. The findings come as the Autumn Budget approaches and speculation mounts over potential changes to property taxation.
A poll of 500 UK mortgage brokers found that 20% identified possible shifts in government policy as the most significant factor influencing clients’ decisions over the next year.
This surpassed other issues such as mortgage regulation and affordability rules (19%), energy and utility costs (19%), and interest rates (17%). The cost of living, previously a dominant issue, was cited by only 14% of brokers as the main concern.
The focus on policy uncertainty follows reports that the Treasury is considering substantial reforms to the property tax regime. Options under review include allowing buyers to pay stamp duty in instalments rather than upfront, imposing seller liability for transactions above £500,000, or replacing stamp duty with an annual property tax.
Recent HMRC data indicates that this uncertainty is already affecting the market. Seasonally adjusted figures published in May 2025 showed a 64% drop in UK residential property transactions from March to April, as buyers sought to complete purchases before anticipated Stamp Duty changes.
Brokers also highlighted the challenges facing specific groups of borrowers. More than 22% said clients with non-standard employment had faced additional hurdles in proving affordability, while 20% noted that first-time buyers increasingly depend on external financial support. The research suggests that ongoing uncertainty over tax and housing policy may exacerbate these difficulties, making it harder for clients to plan ahead.
The broker community is calling for the industry to respond. One in four (25%) want more innovative mortgage products to serve a broader range of borrowers, and 24% are seeking improved support for those struggling with repayments. A further 20% are advocating for greater flexibility for vulnerable customers and those with adverse credit histories.
“Brokers are at the heart of the UK mortgage market, advising almost every homebuyer, so their insights give a real-time view of the challenges and decisions people face,” said Aaron Shinwell (pictured right), chief lending officer at Nottingham Building Society. “What’s clear, with the Budget approaching, is that sweeping changes introduced without careful planning risk creating more uncertainty and reducing market fluidity.
“Any move to annual property taxes would need to be carefully managed to avoid disincentivising downsizing, reducing housing mobility, or creating unpredictable, ongoing costs for retirees and families. These changes could particularly impact pensioners who are ‘asset rich but cash poor’, as well as regions such as London and the South East where a much higher proportion of properties fall above £500,000.”
Policy stability is crucial, Shinwell stressed. “Brokers tell us that without it, clients delay decisions, which in turn restricts both supply and demand,” he said. “That doesn’t just affect those looking to buy or sell today, but has wider consequences for the health of the housing market and the broader economy.
“We support reforms that make the housing system fairer, open up opportunities for first-time buyers and better serve those who are often underserved in today’s market. The Autumn Budget is a vital opportunity for the government to provide clarity and confidence. Done right, reforms can support all parts of the housing market - from first-time buyers to downsizers to renters - and ensure households can make long-term plans with certainty.”
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