Key takeaways:
- The 2026 Autumn Budget was delivered on October 28th, 2026.
- The Budget will have little-to-no impact on mortgage holders.
- A new First-Time Buyer ISA will replace the Lifetime ISA.
- The Chancellor announced the “Your First Home” scheme, a new scheme aimed to support those without the support of “the bank of mum and dad” onto the property ladder.
- Income generated through property will be subject to an additional 2% increase in income tax, on top of the 2% previously announced to come into effect from April 2027.
On 28th October 2026, Chancellor of the Exchequer John Healey delivered the Labour Government’s first Autumn Budget under the new administration.
While there was much anticipation surrounding the new Chancellor’s first budget, the mortgage market went broadly unmentioned. While the Chancellor announced two welcome updates to those looking to step onto the property ladder, those with an existing mortgage won’t be impacted at all.
What key changes were announced in the 2026 Autumn Budget?
New ‘Your First Home Scheme’ for first-time buyers
Chancellor John Healey has confirmed further details of the government’s new Your First Home Scheme, designed to support eligible first-time buyers purchasing a new-build property in England.
Under the scheme, buyers will be able to purchase an eligible property with a 2.5% deposit, alongside a 20% government-backed equity loan and a mortgage covering the remaining 77.5% of the property’s purchase price. The equity loan will also benefit from an initial interest-free period of 3-5 years.
The scheme is expected to be open for applications from February 2027.
Speaking on the new scheme, Nick Feetenby, Associate Director of Cooper Associates Mortgage, said:
“The Your First Home Scheme will of course benefit those looking to purchase a New Build property when their current deposit levels are not at the required amount at this moment. It will also mean that due to a lower mortgage size, their monthly payments initially will be reduced, until payments on the equity loan are payable. This is a positive step towards home ownership for some, with our advisers keen to establish the full details to advise those eligible appropriately. “
First-time buyer ISA will replace the Lifetime ISA (LISA)
The Chancellor announced plans to introduce a new First-Time Buyer ISA designed to support those saving towards their first home.
However, it appears this new ISA will be practically closer to the old Help-To-Buy ISA, which paid government bonuses upon purchasing a qualifying property, rather than while saving.
This, in theory, will allow savers to withdraw without a LISA-style penalty, although full details of the new scheme have yet to be released.
The government are working towards an April 2028 roll-out for this new scheme, however final timelines are also yet to be confirmed.
Our thoughts
Commenting on the changes announced at the Autumn Budget today, Nick Feetenby, Associate Director of Cooper Associates Mortgages, said:
“There was surprisingly only a small amount of additional support proposed for buyers and current homeowners in the recent budget. The key new things announced the new First Time Buyer ISA, and the Your First Home Scheme.
The Your First Home Scheme appears to be broadly similar to the previous Help to Buy scheme which stopped in 2023, with the key difference being that only a 2.5% deposit is now required, rather than the previous 5%. This should allow more people struggling to save for a deposit, the option to consider a New Build property earlier than would currently be the case.”
What changes are being implemented from 2027 onwards?
Alongside the measures announced in the 2026 Autumn Budget, several previously announced changes affecting property owners and landlords are also due to take effect over the coming years. These include changes to the taxation of property income and the introduction of the High Value Council Tax Surcharge.
Below, we revisit the key changes and when they are expected to take effect.
Rental property tax increases
Chancellor John Healey announced an additional 2% increase on rental property taxes, in addition to the 2% announced at the previous Autumn Budget. This results in a 4% total increase in property income tax from April 2027.
The new bands are below:
| Tax band | Current rate | Rate from April 2027 |
| Basic rate | 20% | 24% |
| Higher rate | 40% | 44% |
| Additional rate | 45% | 49% |
For landlords affected by the changes, the higher rates will mean more Income Tax may be payable on taxable property income, potentially reducing the amount of rental income they retain after tax.
With the changes due to take affect from April 2027, landlords may wish to understand how the new rates could affect their individual tax position and consider whether any existing arrangements should be reviewed.
New High Value Council Tax Surcharge (“Mansion Tax”)
Plans to introduce a new High Value Council Tax Surcharge on residential properties worth £2 million or more have also been confirmed and will go ahead from 2028.
First announced in the 2025 Autumn Budget, the surcharge will start at £2,500 per year for properties valued at £2 million and will rise to £7,500 per year for properties worth over £5 million. The additional charge is expected to be collected alongside existing Council Tax payments.
The introduction of the surcharge could also mean that affected high-value properties need to be revalued to determine the appropriate charge.
How can Cooper Associates Mortgages help?
Whether you are hoping to buy your first home, already own a property or have a loved one looking to get onto the property ladder, today’s Budget may have left you with questions about how the announcements could affect you. Our team of expert advisers can help you make sense of the changes and understand what they could mean for your personal circumstances.
In this article, we have outlined the key Budget announcements affecting the housing market. However, other measures could also affect your wider finances and tax position. To discover what today’s Budget could mean for your personal finances and how you are taxed, explore our related articles ‘How the Budget may impact your personal finances’ and ‘How the Budget may impact your taxes’.
If you would like to discuss how the changes could affect you and your mortgage, get in touch to arrange a fee-free, no-obligation meeting with one of our expert advisers. We will take the time to understand your personal circumstances, explain what the announcements could mean for you and help you establish what your next steps may be.
