The Intermediary – November 2025 - Flipbook - Page 19
T E C H N O L O GY
In focus
Effortlessly assist
a better borrower
experience
A
s we edge closer to
Chancellor Rachel
Reeves’ long-awaited
Autumn Budget,
there is a change of
mood in the country.
Reeves has acknowledged that recent
changes in the economic outlook
mean it is no longer realistic to assume
“no more tax increases” for the rest of
this Parliament.
Among the swirling rumours,
there are several that would affect
the housing market. One reportedly
being considered is reform of Council
Tax, either introducing new bands or
replacing the system entirely with a
new local property tax. This would be
based on the property’s market value,
with rates set by individual local
authorities and a possible cap that
would see the levy paid only on homes
up to £500,000, with a minimum
annual payment of £800.
According to a paper by Tim Leunig
for the think-tank Onward, which has
reportedly some influence on Treasury
discussions, the rate of 0.44% would
raise the same amount of revenue as
Council Tax. Under his proposals, the
tax would be introduced immediately,
on all properties, and would be payable
by the owner, not the resident.
Above that threshold, a new
national property tax would become
payable on owner-occupier homes
worth more than £500,000, paid by
the seller on the sale of the property.
Rate would be determined by central
Government and adjusted annually
for inflation. Together, the local and
national property tax would replace
Stamp Duty entirely, a tax long
considered disproportionately unfair.
This would remove upfront costs
for buyers. However, as with all
central Government policy – and local
policy, for that maer – there will be
unintended consequences. It’s highly
likely that any saving made by the
buyer on purchase would simply be
added to the asking price by the seller
– especially on homes worth more
than £500,000.
There are already signs that
properties over this value are not
moving – either because borrowers are
waiting to see whether the rumours
will become true, or possibly because
buyers are wary of commiing to a
purchase and paying Stamp Duty, only
to be landed with a seller’s tax on the
way out. Effectively, buying a property
for over £500,000 now looks like you’ll
be paying property taxes twice.
There’s also been further talk of
introducing a mansion tax, which
would scrap the existing Capital
Gains Tax (CGT) relief on the sale
of a person’s main residence, where
the property’s value exceeds a certain
threshold. At the moment, that’s
rumoured to be around £1.5m.
Over the summer, The Guardian
reported that Government officials
were ordered to explore how the
new ‘proportional’ national property
tax on homes sold for more than
£500,000 would work, and to model
its potential impact.
Leunig’s paper argues that the rate
set by central Government initially
should be 0.54% annually, with an
additional 0.278% surcharge on
property values exceeding £1m. By
seing rates at this level, the Treasury
would – in theory – raise the same
level of income that it currently
receives in Stamp Duty receipts.
Budget aside, if house moving
pauses or slows, then retentions
remain key. The general consensus is
that for the first time ever, refinance
lending is set to outstrip purchase
next year. There are plenty of reasons
for this, including a rising wariness
HAMZA BEHZAD
is business development
director at Finova
about the jobs market, constrained
affordability and very high prices
in the South East and other pockets
around the country. For lenders, then,
the focus over the next 12 months must
be retentions. Fiercely competitive
pricing will work for the largest
lenders in the market – for others,
there must be other differentiators.
Digital experience
Brokers are calling for simpler systems
that save time, reduce administrative
costs, and eliminate unnecessary
friction, a critical factor if your
intention is to retain borrowers who
could probably remortgage onto a
marginally cheaper rate elsewhere.
A smooth, direct digital experience is
also the deciding factor for a growing
number of younger borrowers and for
those now in their 40s. If switching
to a new product with their existing
lender is hard, it’s increasingly likely
they’ll defect to a provider that offers a
more intuitive or accessible process.
The key to improving customer
retention lies in beer digital
experiences for advisers and
borrowers. Competitiveness in the
cloud technology market means
lenders can get up and running far
faster and cheaper than previously,
and the self-funding business case –
with its high return on investment
multiples – makes the investment
decision an easy one.
We’re already working with a wide
range of lenders to get them retention
ready. If the path of least resistance
becomes the business model for beer
retentions, the entire lending value
chain will need to support the delivery
of that effortless customer journey. ●
November 2025 | The Intermediary
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