Chancellor John Healey will deliver the first Budget of Andy Burnham’s premiership on Wednesday 28 October.
Mortgage brokers and lenders will be watching for measures affecting household finances, housing demand and the financial markets that underpin mortgage pricing.
Healey has promised to meet the existing fiscal rules and maintain a buffer against economic uncertainty, including the impact of instability in the Middle East.
Market confidence in the public finances can influence government bond yields and swap rates, which in turn affect the cost and availability of fixed-rate mortgages.
INSTAGRAM REVEAL
In a video message posted Friday afternoon, the Chancellor of the Exchequer, John Healey MP (main picture, inset) said: “This government is working fast to restore hope and back Britain’s communities.
“In the past two weeks, we have begun to kickstart growth in every postcode.
“We have backed British jobs, British skills and British businesses.
“And we have provided just a bit of breathing-space for those families and businesses that feel so squeezed, that feel without hope.
“Today, I’m confirming the date of my first Budget as Chancellor will be Wednesday 28th October.
“This will be a Budget that moves money and power out of Westminster, and into every postcode around Britain.
“It will be built on fiscal discipline.
“It will meet our fiscal rules. It’ll give businesses and families some of the stability they need to plan for the future.
“Now, let’s get on with the job.”
FISCAL CREDIBILITY KEY TO PRICING
HM Treasury says the Budget will provide businesses and families with stability while moving money and decision-making away from Westminster.
The announcement follows the Bank of England’s decision to keep Bank Rate at 3.75%, with three Monetary Policy Committee members voting for an increase to 4%.
A Budget perceived as inflationary or insufficiently funded could place further upward pressure on rate expectations. Conversely, a credible fiscal package could help calm funding markets, although it would not guarantee lower mortgage rates.
STAMP DUTY CHANGE RULED OUT
Burnham has ruled out changing or abolishing stamp duty at the October Budget, reducing the risk of borrowers postponing purchases in anticipation of a tax saving.
The Prime Minister says reforms on the scale of replacing stamp duty with an annual land value tax are not currently being prepared. Stamp duty raised £16.6 billion in the last financial year.
Greater certainty when advising clients already progressing with purchases will no doubt be welcome.
AFFORDABILITY REMAINS IN FOCUS
It’s also likely that all eyes will be on any changes to income tax thresholds, savings incentives or housing support that could alter affordability assessments and deposit accumulation.
Buy-to-let lenders and brokers will also be alert to measures affecting property income, Capital Gains Tax and landlord investment.
Property income tax rates are already scheduled to rise by two percentage points from April 2027 while an annual surcharge on English homes worth more than £2 million is due from April 2028.