Contractor mortgages: Autumn Budget impact and a no-arrangement-fee offer

In this guide, we look at the Budget measures that directly and indirectly affect homeowners, plus things to consider if you want to remortgage or take out a new mortgage in 2026.

Although most of the headlines from last week’s Autumn Budget centred on the increased personal tax burden, several measures were aimed at homeowners, including property taxes and more pain for landlords.

Please scroll down for a special offer from our partner IFA, Broadbench, who are waiving their arrangement fee for new mortgage applicants until the end of March 2026.

No new tax on properties over £500,000

The government has dropped the proposal for a new levy on homes valued above £500,000. This removes a risk that had been circulating in the media since the summer.

Targeted tax on £2m+ homes

A new charge will apply to properties worth more than £2 million. It affects only a small number of homes, mainly in central London, so it is unlikely to affect many contractors.

No changes to Stamp Duty Land Tax (SDLT)

The current stamp duty bands remain unchanged. No incentives for first-timer buyers, and no heavier tax for more expensive purchases.

Landlords face higher income tax

The Chancellor increased income tax on rental profits, which is yet another hammer blow to small-scale landlords.

This affects individuals who hold properties personally. From April 2027, property income tax rates will rise by two percentage points – to 22% (basic), 42% (higher) and 47% (additional).

Finance cost relief will be provided at the separate property basic rate (22%).

There are no changes to the £1,000 property allowance, or the Rent a Room scheme.

Find out more here.

No new mortgage incentives

No new mortgage schemes were introduced. The Treasury restated its intention to encourage more consistent affordability checks for people with variable or self-employed income.

Nothing changes immediately, but lenders are expected to receive updated guidance in 2026.

Planning and housing supply

Existing funding for planning reform and local authority building programmes continues. There were no significant new schemes or targets. The overall message from the Chancellor appears to be to maintain stability.

Energy-efficiency support reinstated

Grants for insulation and heat-pump installations have been refreshed. This is most relevant for buyers of older homes who expect to undertake renovation or energy-efficiency work.

Personal tax: dividend rise and frozen bands

Unfortunately, all contractors will pay more tax, thanks to the dividend tax hike and the freezes on income tax thresholds.

Need a mortgage, or thinking about a remortgage?

Despite the high level of taxation, it is clearly a good thing that no new widespread property-related taxes have been announced, such as an SDLT hike, and interest rates remain steady. The property market famously hates uncertainty.

If you’re thinking of moving home or buying a property over the next year, or if you’re a landlord, this is a good time to speak to a mortgage adviser who can let you know your borrowing power and the outlook for lending.

Get a mortgage review – save up to £500!

We’re proud partners of Broadbench, the contractor mortgage specialists.

You have access to a complimentary mortgage review with Jordan, their Senior Mortgage Adviser, who specialises in contractor and non-standard income cases.

Jordan will help you:

• Compare rates across the whole market, including exclusive deals not available directly.
• Deal with contractor-friendly underwriting teams to streamline your application.
• Explore additional borrowing, adjust your current mortgage or help you onto the housing ladder.
• Continuously review your protection cover and automatically switch you to a better deal if one becomes available before your mortgage starts.

A review takes just 30 minutes…

PLUS, they’ve waived their advice fee for our clients who take out a mortgage between now and the end of March. This could save you up to £500!

(Offer available to new customers only.)

If you’d like to find out how the Autumn Budget impacts your plans, or want to check you’re not overpaying with your current lender, fill in this form to get in touch with the Broadbench team.

You can read more about how the mortgage process works in our complete guide to contractor mortgages.