Following the Chancellor’s Autumn Statement, experts urge borrowers to look beyond the OBR forecasts and focus on the reality of the lending market.
If the headlines following Rachel Reeves’ November Budget have left you feeling uneasy, you are not alone. Between talk of new property levies and a widely circulated forecast from the Office for Budget Responsibility (OBR) regarding interest rates, the landscape can seem daunting for the average borrower.
However, a closer look at the details reveals a picture of stability rather than volatility. While the Chancellor’s “black hole” budget has introduced changes for high-net-worth investors and landlords, the outlook for the standard residential mortgage holder is far less dramatic than the front pages suggest.
Here is the Quick Mortgages breakdown of what the Autumn Budget 2025 actually means for your property finances.
The Truth Behind the “5% Rate” Forecast
The most alarming statistic to emerge from the budget documents was the OBR’s prediction that mortgage rates will rise to 5% by 2029. For those looking to buy or remortgage, this figure naturally caused concern.
However, it is crucial to understand the context of this data. The OBR figure refers to the average interest rate on all outstanding mortgages in the UK—the “aggregate” stock. This includes millions of homeowners currently sitting on historic lows of 1% or 2% fixed deals who have not yet refinanced. As these borrowers gradually switch to today’s prevailing rates, the “average” of the entire pile naturally ticks upward.
Crucially, this does not reflect the price of new mortgage deals available on the high street today. With the Bank of England Base Rate holding steady at 4%—and markets pricing in a potential cut in early 2026—lenders remain competitive. The cost of new borrowing is stabilising, not skyrocketing.
Relief for Buyers: Stamp Duty Holds Firm
Despite intense speculation in the weeks leading up to the dispatch box, the Chancellor declined to alter Stamp Duty Land Tax (SDLT) thresholds for the majority of buyers.
This non-move has been welcomed by the industry as a “stability budget” for homebuyers. It ensures that those currently in property chains face no unexpected costs, and it removes the cliff-edge panic that often accompanies temporary tax holidays.
The “Mansion Tax” and Landlord Levies
While standard residential buyers were spared, the Chancellor did target the upper echelons of the market and the Buy-to-Let sector.
The High Value Surcharge: A new Council Tax surcharge was announced for properties valued over £2 million, dubbed by the press as the new “Mansion Tax.” Set to come into effect in April 2028, this will likely factor into the long-term affordability checks for super-prime buyers, though it leaves the wider market untouched.
The Landlord Squeeze: Investors face a tighter squeeze from April 2027, with a confirmed 2% rise in tax on property income. For landlords, this highlights the importance of portfolio reviews. With two years to prepare, savvy investors are being advised to review their mortgage costs now to offset the future tax burden.
The Outlook: “Higher for Longer”
The era of near-zero interest rates is firmly in the rear-view mirror. The market consensus following the budget is a “higher for longer” environment, where rates settle into a new normal of between 3.5% and 4.5%.
For borrowers, the advice from brokers is consistent: waiting for a return to 2021 rates is a risky strategy.
Quick Mortgages Comment:
“The headlines are designed to grab attention, but the reality is that the mortgage market remains open and highly active. Lenders have money to lend and are fighting for business. The OBR forecast is a lagging indicator of old cheap deals expiring, not a leading indicator of where new rates are going.
“Our advice to clients is to ignore the macro-averages and look at the specific deal on the table for you today. Stability is valuable, and right now, the market is offering exactly that.”
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Disclaimer:
This article is for general guidance purposes only and does not constitute legal, financial, or professional advice. Mortgage products and their terms can vary, and it is important to seek advice from a qualified, regulated professional who can assess your individual circumstances. Please ensure you consider your unique needs before making any financial decisions.
While every effort is made to ensure that the information provided on this blog is accurate and up-to-date, we do not guarantee its completeness or accuracy. The mortgage market can change rapidly, and the information on this blog may become outdated. We recommend verifying any information before acting on it and seeking tailored advice.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
