A breakdown of the 2026 Spring Statement
On 3rd March 2026, Chancellor of the Exchequer, Rachel Reeves, delivered the Labour government’s Spring Statement. During her statement, the Chancellor reiterated the government’s pledge to reserve major fiscal announcements to one per year at the Autumn Budget. As a result, the 2026 Spring Statement will have very little direct impact on the mortgage market.
However, upcoming measures announced at the Autumn budget and the wider economic backdrop continue to shape interest rates, lender behaviour and borrower confidence. For homeowners, first-time buyers and home movers, understanding how these factors may influence mortgage options and affordability remains an important part of financial planning for the year ahead.
The highlight of the Chancellors speech was the announcement that the Office for Budget Responsibility (OBR)’s forecasts expect inflation to fall faster than expected at the Autumn Budget. At the Autumn Budget, the OBR forecast inflation to fall from 3.4% to 2.5% throughout 2026. This forecast has now been updated, with inflation forecast to fall to 2.3% throughout the year.
The CPI is currently at 3.2%.
This updated forecast should provide encouragement to both current homeowners and those looking to access the property ladder for the first time, as falling inflation may stimulate further base rate reductions from the Bank of England’s Monetary Policy Committee.
It should be noted, however, that the current foreign geopolitical events making global headlines add an additional level of doubt surrounding domestic fiscal policy, and the OBR was clear that forecasts do not take the current global landscape into account. While we may well see further reductions to base rate throughout the year, the immediacy with which the MPC will make its decision is now in question.
Speaking on the Spring Statement, Thomas Jackson, Managing Director of Cooper Associates Mortgages, stated:
“As expected, the Spring Statement contained very little in terms of direct mortgage policy. However, the improved inflation outlook is encouraging. If that trend continues, it strengthens the case for further rate reductions this year, which would be a positive development for borrowers planning their next move.”
What are the upcoming mortgage market changes?
Following today’s announcement, there will be no immediate changes to the mortgage market, and no major policy reforms are expected in 2026. However, the Autumn Budget introduced several measures set to take effect from 2027 that could impact homeowners.
Rental property tax increases
From April 2027, income tax rates on rental income will increase by 2%. The proposed changes will apply across all tax bands, increasing the basic rate to 22%, the higher rate to 42%, and the additional rate to 47%.
These increases will raise the effective tax burden on rental profits, potentially reducing net returns for landlords and property investors. As a result, affected individuals may wish to review their property ownership and financing structures, alongside wider tax planning considerations, ahead of the changes taking effect.
New high value council tax surcharge
Homeowners with properties valued at £2 million or higher are expected to be impacted by a new annual high value surcharge, often referred to as “Mansion Tax”, which is due to be introduced from 2028.
Under the proposals outlined to date, the surcharge will begin at £2,500 per year for properties valued at £2 million, with charges rising to £7,500 for properties worth over £5 million. The charge is expected to be collected as an additional charge alongside existing council tax payments, although details around payment deferrals and exemptions have yet to be confirmed.
The introduction of the surcharge may also require a revaluation of high value properties to ensure charges are applied correctly. At present, council tax operates across eight bands, but more will be known once the full details have been released.
What does this mean for our clients?
While the Spring Statement had very little immediate impact on borrowers, those approaching the end of a 2-year or 5-year fixed-rate deal, considering remortgaging, or planning to move homes may benefit from reviewing their options early and seeking professional advice. This will help ensure their mortgage strategy remains aligned with both current market conditions and longer-term financial goals.
At Cooper Associates Mortgages, we continuously monitor interest rate movements and always aim to move our clients to a more competitive rate should one become available to them.
Once a product has been selected, we continue to track rates on your behalf. If a lower rate were to become available between your mortgage offer and up to two weeks before completion, we will aim to switch you to that improved rate wherever possible. This ensures that you benefit from the most competitive option available at the time of completion.
How can Cooper Associates Mortgages help?
This article outlines the key updates and upcoming changes announced in today’s Spring Statement that may impact the mortgage market. However, it is important to be aware of the wider financial measures that may also affect you. Please follow the links to explore how the announcement could impact your personal finances or tax position.
If you have any concerns about how the confirmed or upcoming changes may influence your mortgage, repayments or future borrowing plans, our team of expert advisers is here to help. We provide tailored guidance based on your individual circumstances, ensuring you feel informed, supported and confident in your next steps.
