Tax hikes and rate rises set to hit homeowners

Homeowners could see higher rates and find home loans tougher to come by as banks roll out changes to mortgages ahead of tax increases and probable interest rate rises. With Chancellor Rishi Sunak freezing many tax-free allowances and introducing around £85bn in tax increases – including 1.25% increases in national insurance and dividend tax from 2022 – homeowners are likely to have less money to cover repayments. Paul Haywood-Schiefer from Blick Rothenberg says that while Mr Sunak implemented a stamp duty holiday during the pandemic “which pushed property transactions through the roof”, the tax increases will leave many of those who snapped up homes with less spare cash. Ali Hussain in the Sunday Times notes that between April and June, a record 57% of new mortgages were classed as large, up from 50% a year ago.

The Sunday Times (14/11/2021)