The wait for the Budget seems like an eternity – in a sense, it comes too soon! The Office for Budget Responsibility report is usually released a few hours after the chancellor announces the budget, but it was unexpectedly released 35 minutes earlier.
The aftermath of what was soon dubbed “budget chaos” was arguably fitting for such a tumultuous year.
As Lewis Shaw, a broker at Shaw Financial Services, said, if there was a subtitle for 2025, it would be “man-made chaos with predictable consequences.”
Government needs to clarify plans for energy efficiency standards and ensure more reasonable timetables
Shaw said: “The government first let stamp duty relief for first-time buyers expire in April, triggering a six-month panic buying frenzy that was like the last toilet roll in March 2020.
“The age of conveyancers is about 15 years and then April comes and there’s a sharp drop in volumes.
“The doomsayers are coming out and saying the housing market is doomed, I think this is the eighth time I’ve heard that in the last few years.
“To be fair, transaction volume did drop by 64% in a single month.”
Shaw added: “Nobody could have predicted this except everyone who has ever seen a stamp duty deadline.
“Meanwhile, mortgage rates have had their best impression of the year, like a toddler in a sugar rush. They rose in January, fell after Trump’s tariffs spooked the market (cheers, Donald, I guess?), picked up around the budget, and dropped again when lenders remembered they loved making money. If you’ve managed to time your purchases perfectly during all of this, congratulations — you should probably start day trading.”
If 2025 was the year the market stabilized, then 2026 could be the year the market starts moving forward again
Gerard Boon, managing director of Boon Brokers, noted that mortgage rates continued to fall as the Bank of England cut its base rate.
This increases demand for mortgage loans, which is good for business. House prices across the country have generally remained resilient.
Boone is encouraged that many lenders are increasing income multipliers for first-time homebuyers. However, he highlighted some inevitable negatives.
“I don’t think it’s controversial to say that there is significant economic uncertainty across all sectors in the UK.
“This is somewhat unsettling for customers seeking mortgage debt, particularly in the southern and coastal areas of the country where economic growth is weak.”
Boone continued: “Many sellers in these areas struggle to sell their properties for their asking price.
Some form of Help to Buy scheme would provide first-time buyers with a more reliable path to upgrade
“This leads nicely into the second negative for the industry this year, which is that lenders’ valuations are difficult to predict.
“Especially for the remortgage market, valuations are important to borrowers as many homeowners will be moving to higher rates than on their previous deal.
“It is therefore a shame that surveyors have made so many downward revisions to their valuations this year, which is likely to stem from uncertainty rather than true property values. This has resulted in many homeowners facing higher loan-to-value ratios on their properties, with higher mortgage rates as a direct result.”
Kate Davies, executive director of the Association of Intermediary Mortgage Lenders, also believes 2025 will bring some headwinds.
“Planning permission numbers continue to fall, putting further pressure on already tight supply pipelines,” she said.
“Landlords face another tightening, this time with higher income tax on rental income, compounded by the introduction of the Tenants’ Bill of Rights, which many fear will increase costs and reduce viability.”
It’s such a shame to see so many surveyors lowering their valuations this year
Ben Beadle, chief executive of the National Association of Residential Landlords, insists the most important thing about 2026 is a year of stability.
Beadle said: “The government must quickly publish all the regulations needed to bring tenancies across England up to date in time for the replacement of the Section 21 system, which comes into force in May.”
“This will not happen overnight and the current plan to publish regulations in January will not give the industry enough time to prepare.”
Beadle added: “The government also needs to clarify its plans for energy efficiency standards in the sector and ensure a more reasonable timeframe for achieving its proposed targets.
“The lack of financial support for the investment required, combined with a chronic shortage of business people to implement energy efficiency works, makes ministers’ proposals completely unfeasible.”
Mortgage rates make best impression on young children this year
Looking ahead to 2026, Davis welcomes more meaningful improvements in affordability, whether driven by lower interest rates, growing real incomes or continued regulatory flexibility, which will help unleash pent-up demand.
“Some form of Help to Buy scheme would provide a more reliable route to purchase for first-time buyers, although the government has given no indication that it will consider any such support,” Mr Davies said.
“Above all, we want a period of real policy stability – a ‘hands off’ approach to the housing market that avoids damaging tax intervention and gives buyers, sellers and lenders room to plan with confidence.
“If 2025 is the year the market stabilizes, then 2026 has the potential to be the year the market starts moving forward again.”
This article appears in the December 2025/January 2026 edition Mortgage strategy.
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