Responses to the government’s recent budget have highlighted the persistent challenges facing potential homebuyers and property owners across income brackets, from young professionals priced out of the market to high earners struggling with mortgage costs.
Louie, a 24-year-old chef in London earning between £37,000 and £40,000 annually, said many in his age group have “written off the idea of even considering getting a property” in their 20s. He expressed cautious optimism about the government’s new Your First Home scheme, which enables buyers to purchase new-build properties with a 2.5% deposit supported by an interest-free equity loan.
However, Louie noted that volatile hospitality wages make saving for a deposit difficult. He shares a three-bedroom rented property with two friends, with rent and bills now consuming approximately half his income, significantly above the traditional one-third guideline. His landlord recently announced a £200 monthly rent increase effective November.
High earners face cost pressures
Graham Robinson, who runs KeySim in Timperley, Greater Manchester, earned £126,000 last year but reported having virtually nothing remaining at the end of each month. After tax, his income amounts to approximately £6,500 monthly.
Robinson expressed disappointment that the employment allowance remained at £10,500 while businesses face rising wage bills. His mortgage payments have increased from approximately £900 to £1,300 monthly, while other household expenses have also risen. The 45-year-old, who shares care of his 10-year-old autistic son and covers all childcare costs, is particularly concerned about the effective 60% income tax rate on earnings over £100,000 caused by the gradual withdrawal of the personal allowance.
Recent analysis has shown that income tax on rental earnings will rise by 2% from April 2027, adding further pressure on property investors and landlords already facing increased costs.
Mortgage rate impact on families
Helen, a 40-year-old communications professional in south-west London, reported that her family’s mortgage increased by more than £600 monthly when interest rates rose. They have now fixed their rate until 2028. As the main breadwinner living with her husband and two children aged eight and five, she welcomed the £100 winter energy payment for households in council tax band D, though questioned the methodology of distributing support based on bands rather than financial need.
Her husband’s architectural practice, less than four years old, has struggled with rising building costs and a wider slowdown in construction. Helen cited energy costs affecting steel prices, material transportation, and homebuilding as ongoing challenges.
The OBR’s revised house price forecasts downward for 2026 reflect the continued uncertainty in the property market as households navigate elevated mortgage rates and living costs.
Conclusion
The budget responses illustrate the varied pressures facing the housing market, from first-time buyers deterred by high rents limiting their ability to save, to established homeowners managing significantly higher mortgage payments. Frozen income tax thresholds and rising business costs were cited as additional concerns affecting both property ownership and the wider construction sector.
