For high-net-worth (HNW) borrowers, the Chancellor’s Budget delivered something that has been missing in recent months: clarity. Although many of the major tax measures announced will not take effect for some time yet, the near-term landscape is now more predictable. This matters for clients considering large mortgages or complex property transactions, who now have a clear view of the horizon before they take the plunge and commit to a significant move.
A key source of hesitation had been speculation about possible changes to Stamp Duty. Clients with significant borrowing requirements are highly sensitive to shifts in property taxation, given the scale of the transactions they undertake. The confirmation that Stamp Duty will remain unchanged removes a concern that had held many high-value purchases in a holding pattern. The effect is especially relevant in London and the South East, where prime properties are usually at their most pricey.
Because most of the new tax measures will not take effect until 2028, the Budget does not create immediate fiscal tightening. For HNW borrowers, this matters because it feeds directly into expectations around interest rates. The near-term environment still points towards a Bank of England rate cut in December, and Investec expects the Bank Rate to fall to 3% by the end of next year. This would offer greater comfort to buyers taking out larger mortgages, where even small reductions in borrowing costs have a sizable impact.
The market reaction to the Budget was also modest. Gilt markets remained stable and strengthened after the updated Debt Management Office financing plans were released. Stable gilt yields feed directly into mortgage pricing, especially at the upper end of the market where loan sizes magnify the effect of small shifts in funding costs. Clients who have been monitoring rate movements will take comfort from the calmer backdrop.
The Mansion Tax, described by some as effectively a council tax surcharge on larger properties, has also been an important area of focus. While this is in train, it will apply only from 2028, and payment can be deferred until the property is sold. Although future liabilities will rise for affected households, the long implementation window provides time for planning. This structure avoids sudden disruption and is unlikely to produce immediate pressure on prime market activity. It gives clients the opportunity to adjust their financial planning and lending strategies in a measured way.
This clarity will now allow prospective clients to re-enter the market, and I believe we will see those waiting in the wings move centre stage. The combination of reduced uncertainty, a more stable path for inflation and an expectation that borrowing costs will ease over time is likely to release considerable pent-up demand. We expect much of this to come through in the first quarter of 2026, especially among clients who have been waiting for a more predictable environment.
Intermediaries play a vital role in helping clients re-engage with the market, and we are deeply invested in supporting their growth and working alongside them at every stage. The fundamentals that drive high-net-worth borrowing remain intact. Demand has been deferred rather than diminished, and the environment is increasingly supportive of renewed activity.
The Budget has provided the stability high-net-worth clients needed. With clearer policy signals, a calmer gilt market and an outlook that still points towards lower interest rates in the months ahead, the foundations are in place for a stronger 2026.
Peter Izard is head of business development intermediary mortgages at Investec
