The Intermediary – December 2025 - Flipbook - Page 12
RESIDENTIAL
Opinion
High-net-worth
borrowers are back
PETER IZARD
is head of business
development intermediary
mortgages at Investec
The mansion tax will apply only from 2028 and payment can be deferred until the property is sold
F
or high-net-worth
(HNW) borrowers, the
Chancellor’s Budget
delivered something
that has been missing in
recent months: clarity.
Although many of the major tax
measures announced will not take
effect for some time yet, the near-term
landscape is now more predictable.
This maers for clients considering
large mortgages or complex property
transactions, who now have a clear
view of the horizon before they
take the plunge and commit to a
significant move.
A key source of hesitation had been
speculation about possible changes to
Stamp Duty. Clients with significant
borrowing requirements are highly
sensitive to shis in property taxation,
given the scale of the transactions
they undertake.
The confirmation that Stamp Duty
will remain unchanged removes a
concern that had held many highvalue purchases in a holding paern.
The effect is especially relevant in
London and the South East, where
prime properties are usually at their
most pricey.
Because most of the new tax
measures will not take effect until
2028, the Budget does not create
immediate fiscal tightening.
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The Intermediary | December 2025
For high-net-worth borrowers, this
maers because it feeds directly into
expectations around interest rates.
The near-term environment still
points towards a Bank of England
rate cut in December, and Investec
expects the Bank Rate to fall to 3% by
the end of next year. This would offer
greater comfort to buyers taking out
larger mortgages, where even small
reductions in borrowing costs have a
sizable impact.
The market reaction to the Budget
was also modest. Gilt markets
remained stable and strengthened
aer the updated Debt Management
Office financing plans were released.
Stable gilt yields feed directly into
mortgage pricing, especially at the
upper end of the market where loan
sizes magnify the effect of small
shis in funding costs. Clients
who have been monitoring rate
movements will take comfort from
the calmer backdrop.
The ‘mansion tax’, described by
some as effectively a Council Tax
surcharge on larger properties, has
also been an important area of focus.
While this is in train, it will apply
only from 2028, and payment can be
deferred until the property is sold.
Although future liabilities will
rise for affected households, the long
implementation window provides
time for planning. This structure
avoids sudden disruption and is
unlikely to produce immediate
pressure on prime market activity. It
gives clients the opportunity to adjust
their financial planning and lending
strategies in a measured way.
This clarity will now allow
prospective clients to re-enter the
market, and I believe we will see those
waiting in the wings move centre
stage. The combination of reduced
uncertainty, a more stable path for
inflation and an expectation that
borrowing costs will ease over time is
likely to release considerable pentup demand. We expect much of this
to come through in the first quarter
of 2026, especially among clients
who have been waiting for a more
predictable environment.
Intermediaries play a vital role in
helping clients re-engage with the
market, and we are deeply invested in
supporting their growth and working
alongside them at every stage.
The fundamentals that drive highnet-worth borrowing remain intact.
Demand has been deferred rather than
diminished, and the environment
is increasingly supportive of
renewed activity.
The Budget has provided the
stability high-net-worth clients
needed. With clearer policy signals, a
calmer gilt market and an outlook that
still points towards lower interest rates
in the months ahead, the foundations
are in place for a stronger 2026. ●
The views and opinions expressed in this article
are those of the author and do not necessarily
reflect the views of Investec or its affiliates. This
content is provided for general information only
and should not be regarded as financial, legal, or
professional advice.
