London Daily

Focus on the big picture.
Monday, Jul 20, 2026

Budget means tax rises ahead – and little new for first-time buyers

Budget means tax rises ahead – and little new for first-time buyers

Analysis: Freezing allowances will lead to more people paying income tax, while the stamp duty holiday is driving up house prices
We can hardly call them “stealth tax rises” this time around, as the chancellor was at pains to spell out the impact of his decision to freeze both personal allowances and the amount you can put in your pension over your working life. But for many people the increases outlined in the budget may remain under the radar for a while.

Personal allowances will rise as planned in April. The first £12,750 of income will still be tax-free, while the 40% rate will kick in at £50,270. But after that there will be no change until 2026. Any inflation-linked increase in pay or benefits will therefore be eroded by the extra tax you will pay.

On pensions, it is only those with the biggest pots that will rub against the limit, which will be just over £1m.

Freezing income tax thresholds does not mean taking home less, but more people move into paying tax, or pay the higher rate – so much so that Treasury expects to make £19bn from this move over four years.

By 2026, the OBR reckons 1.3 million more people could become taxpayers and another 1 million could be pushed in to the 40% bracket.

The upside is that this has all been put off by at least a year, and if things go better than expected a future budget might even see plans change.

But family budgets already need to stretch further. Unmentioned in the budget, but coming down the track, are big rises in council tax, with some local authorities planning to increase bills by the maximum 4.99% they are allowed.

Energy bills have started to tick upwards, and other services are also getting more expensive. If inflation takes off, the chill of those freezes will be felt.

As is often the case with Tory budgets, the housing market played an important part in Sunak’s speech with confirmation of the heavily trailed return of 95% mortgages, and an extension of the stamp duty holiday. It was all good news for those who can afford to buy or are almost there, but is unlikely to be enough to turn “generation rent” into “generation buy” as billed.

The stamp duty threshold will remain at £500,000 until the end of June, which means it is likely that the scramble for bigger homes could continue throughout the spring. After that it will drop to £250,000 until the end of September – and we can expect an autumn of calls for it to stay that way, rather than reverting to the previous level of £125,000.

So far the stamp duty holiday has driven up prices, creating almost as many problems for would-be buyers as the withdrawal of 95% mortgages. With the announcement of a government guarantee to get large loans going again, Sunak will help some thwarted buyers.

But as well as pulling those large loans since the crisis hit, lenders have also spent the last year fiddling with criteria and more closely scrutinising the would-be borrowers who come through their doors. Some have limited the loans they will give to the self-employed, others have ruled out mortgages for those on furlough. Until the country is on a more even keel generally, it seems likely many people will still be locked out of large loans.

And Sunak’s fixes are all at the demand side: there is nothing new to stimulate supply. That 5% buyers need to save as a deposit will keep getting bigger as long as prices go up, so homebuying will still remain outside the grasp of many.
Newsletter

Related Articles

0:00
0:00
Close
Brilliant move: Péter Magyar Moves to Nominate Chess Grandmaster Judit Polgár as Hungary’s President
Spain Defeats Argentina in Extra Time to Win Second World Cup
Jingye Demands Full Compensation After Britain illegally Nationalized British Steel
Police Block Cockroach Janta Party’s March to Parliament as Education Protests Intensify
Current AI Seeks to Build an Open Global AI Infrastructure Outside Big Tech Control
Turkey Explores S-400 Transfer to UAE in Bid to Rejoin F-35 Program
Josh Kerr Breaks Twenty-Seven-Year World Mile Record at London Diamond League
Thames Water Crisis Deepens as South East Water Outages Hit Thousands in Kent
EU Ban on Destroying Unsold Clothing Forces British Fashion Brands to Change Operations
UK Government Confirms Existing North Sea Oil and Gas Licences Will Be Honoured
UK Covid Inquiry Finds Nearly Ten Billion Pounds Lost in Pandemic Protective Equipment Procurement
Thames Water Moves Toward Possible Temporary Nationalisation Amid Rescue Plan Dispute
Andy Burnham Cancels One Point Eight Billion Pound Digital ID Programme After Taking Office
UK Government Takes British Steel Into Full Public Ownership to Protect Jobs and Supply Chains
Andy Burnham Becomes UK Prime Minister and Pledges Focus on Living Costs and Public Services
Germany’s Economic Malaise Reopens the Sunday Shopping Debate
Singapore Considers Lower Taxes for Fund Managers as Hong Kong Intensifies Talent Contest
US Retaliates Against Iran After Two American Troops Killed in Jordan
Bank of Asia BVI Enters Court-Supervised Liquidation After Regulators Find It Insolvent
Proposed U.S.-Saudi Nuclear Pact Could Permit Limited Uranium Enrichment Under International Safeguards
Netherlands Declares Water Shortage Emergency After Drought Pushes Rivers to Historic Lows
Why Kentucky Fried Chicken Became KFC—and Why the False Explanations Persist
Iran Claims It Destroyed Bahrain’s Main Artificial Intelligence Center in Missile and Drone Strike
Ukrainian Drones Strike Wildberries Warehouses Deep Inside Russia
Brothers Andrew and Tristan Tate Who Turned "Toxic Masculinity" Into a Brand Arrested in Miami as Britain Seeks Their Extradition
Reported CIA Mission Helped Clear the UAE’s Path to Advanced US AI Chips
Artificial Intelligence Capital Fuels Markets While Governments and Regulators Face Mounting Strategic Tests
China’s Moonshot’s Kimi K3 Narrows the Gap With Anthropic Through Scale, Openness and Lower Cost
Gold and Cash Seizure Puts Indonesia’s Senior Anti-Corruption Prosecutor Under Investigation
The Ledger Will Not Trust on Faith
Bank of England Warns Climate Shocks Could Trigger Sudden Asset Repricing
UK Treasury Places Microsoft, Google, AWS and Oracle Under New Financial Resilience Rules
Scottish Government Faces Pressure Over Delays in Vulnerable Group Background Checks
Crown Prosecution Service Authorises Additional Charges Against Andrew and Tristan Tate
NHS Approves At-Home Cancer Treatments for Rare Blood Disorders
Bank of England Gains Oversight of Major Cloud Providers Supporting UK Financial System
UK Government Plans Major Overhaul of English Local Councils Through New Unitary Authorities
British Steel Nationalisation Dispute Escalates as Chinese Owner Jingye Seeks Compensation
Bank of England Signals Interest Rates Will Stay High as It Warns of Financial Risks From Climate and AI
Trump Administration Pressures Banks to Restrict Financial Access for Undocumented Immigrants
Passenger Bound for Germany Refused to Sit Beside a Woman on a Plane — Then Slapped a Flight Attendant
Ukraine’s Leadership Rift Spills Into the Streets as Protesters Target Army Chief
Ukrainian Drone Barrage Kills Eight and Strikes Russian Logistics Network
Key Trends to Watch
Financial Conduct Authority Warns Cloud and Digital Risks Are Becoming a Financial Priority
Jeffrey Donaldson Appeals Sexual Abuse Conviction as Democratic Unionist Party Opens Review
Welsh Health Authorities Launch Emergency Meningitis Vaccination Programme for Students
Scottish Business Activity Falls for Third Month as Companies Face Rising Costs
Bank of England Regulators Demand Better Access to Digital Banking Services
United Kingdom Cuts Bilateral Aid to Several African Countries by Up to Ninety Per Cent
×