London Daily

Focus on the big picture.
Saturday, Mar 14, 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
Middle East War Highlights Strategic Importance of Strong UK–Ireland Cooperation
Weak Growth Signals UK Economy Was Faltering Even Before Middle East Energy Shock
Marks & Spencer Tops UK Fashion Retail Rankings as Most Considered Brand
United States Launches Trade Investigation Into Allies Over Forced Labour Practices
United States Launches Trade Investigation Into Allies Over Forced Labour Practices
Russia Accuses Britain Over Storm Shadow Strike as London Reaffirms Ukraine’s Right to Self-Defence
Russia Accuses Britain Over Storm Shadow Strike as London Reaffirms Ukraine’s Right to Self-Defence
Royal Navy to Acquire Twenty Uncrewed Surface Vessels for Autonomous Warfare Testing
Russia Summons British and French Envoys After Ukrainian Storm Shadow Strike on Strategic Facility
Starmer Confirms Britain Will Maintain Sanctions on Russia Despite U.S. Policy Shift
UK Moves to Refine AI Definition in Investment Security Reform
UK Economy Stalls in January as Growth Unexpectedly Falls to Zero
Asian Energy Security Tested as Strait of Hormuz Disruption Threatens Oil Supplies
Iran Sets Three Conditions for Ending Regional War as Diplomatic Efforts Intensify
Tesla Secures Approval to Supply Electricity Directly to Homes Across Britain
Prince William Delivers Tribute to Australia’s Naval Alliance Amid Renewed Royal Spotlight on the Country
UK Foreign Secretary Travels to Saudi Arabia to Reinforce Support for Regional Allies
Putin’s ‘Hidden Hand’ May Be Assisting Iran in Conflict With Trump, UK Defence Secretary Warns
UK Sets April Deadline for Tech Platforms to Strengthen Online Protections for Children
Elon Musk Moves Into Britain’s Energy Market as Tesla Wins Licence to Supply Power
UK Watchdog Warns Fuel Retailers Against Profiteering Amid Iran War Price Surge
Report Claims Iran Used UK Charity Network to Expand Influence
United States and United Kingdom Establish Joint Standards for Counter-Drone Technology
Iran May Be Laying Naval Mines in Strait of Hormuz, UK Warns Amid Escalating Gulf Tensions
US Deploys Bunker-Buster Bombs to UK Airbase as Iran Conflict Intensifies
British Troops in Iraq Intercept Iranian Drones Targeting Coalition Base
Release of Mandelson Files Raises Tensions as UK Seeks Stable Relations With Donald Trump
UK Documents Reveal Starmer Was Warned About Mandelson’s Epstein Links Before Ambassador Appointment
Nearly Five Hundred UK Mortgage Deals Withdrawn in Two Days as Market Volatility Forces Lenders to Reprice
Three Cargo Ships Hit Near Iran as Attacks Spread to Strategic Strait of Hormuz
Why British Police Repeatedly Declined to Investigate Jeffrey Epstein’s UK Links
UK Parliament Ends Hereditary Seats in House of Lords, Closing Chapter on Centuries of Aristocratic Lawmaking
EU and UK Urge Israel to Act Against Rising West Bank Settler Violence Amid Regional Tensions
US Senator John Kennedy Says Keir Starmer Should Not Be Trusted for Military Advice Amid Iran War Debate
UK High Court Rejects Attempt to Revive Terrorism Charge Against Kneecap Rapper
Revolut Secures Full UK Banking Licence After Multi-Year Regulatory Wait
Kentucky’s Bench Boost Powers Wildcats Past LSU in SEC Tournament Opener
British Couple Die After Being Pulled From Water at Australian Beach During Family Visit
Global Energy Agency Announces Record Release of 400 Million Barrels to Stabilize Oil Markets Amid Hormuz Disruption
British Airways Suspends UK Repatriation Flights as Middle East Travel Disruption Deepens
US Forces Prepare Ordnance at RAF Fairford as Strategic Bombers Deploy for Middle East Operations
Nigel Farage Faces Criticism After Saying Britain Should Stay Out of Iran War
Landmark UK Trial Begins Over Sony’s PlayStation Store Pricing
UK High Court Rejects Bid to Challenge Britain’s Chagos Islands Agreement With Mauritius
Finnish Duo Triumphs in England’s Annual Wife-Carrying Race, Winning a Barrel of Ale
How U.S. and UK National Security Strategies Are Reshaping the Global Business Landscape
Green Party Gains Momentum as Labour Shifts Toward the Political Centre
Royal Navy Destroyer HMS Dragon Sets Sail for Eastern Mediterranean as Regional Tensions Rise
UK Homebuilder Persimmon Warns Iran Conflict Could Dent Property Buyer Confidence
Roman Abramovich Signals Legal Fight if UK Seeks to Seize Chelsea Sale Funds
×