Budget predictions from the specialist finance market

As the Chancellor prepares to deliver the Autum Budget, the bridging and specialist finance sector is bracing for potentially market-moving decisions. High borrowing costs, sluggish growth and speculation over tax reform have left lenders, brokers and property investors waiting to see which measures will stimulate and which will stifle. Here, experts from across the sector offer their thoughts on what Reeves should and shouldn’t deliver in her speech next week.

Like many, Nick Jones, sales and marketing director at Access FS, believes Reeves should take a radical approach to inject some momentum into the market by scapping stamp duty altogether. “Stamp duty is a regressive tax,” Nick argues.  “And it hits hard when you are trying to relocate – so it’s a tax on mobility, too, holding break growth.  Not only does it penalise people who have saved enough to buy a home and now need to upsize or to relocate for work, it encourages older homeowners to stay put in larger homes, even if their children have long flown the nest.  Let’s not forget that stamp duty hits tenants, too – how else do landlords recoup the money they spend on the surcharge but through higher rents?”

As an alternative, Nick advocates for reforming the outdated council tax system. “It doesn’t seem crazy to refresh the valuations currently used as the basis for our council tax calculations.  Council tax was introduced in 1991 and the property valuations used to determine how much each household in England pays have not been updated since then.

“A full revaluation of council tax would not only update this anachronistic system, but also provide a handy way for the state to rake in some extra revenue with rises in how much tax is charged on each of the new bands, especially at the top end.”

Mel Spencer, growth director at Target Group agrees, suggesting that Reeves could replace council tax with “an annual levy based on a proportion of the value of each home” to create a fairer and more lucrative system. “This would be paid by the owner of the property (not necessarily the person who lives there) and would go to national and local public services,” she continues. “A tax on a percentage of the value of most homes, as mooted by former Treasury economist Tim Leunig, with higher rates on more expensive properties could cover more than the existing council tax take.  That might be quite a revolutionary overhaul of the way property is taxed but it would remove a regressive council tax as well as eliminating a disincentive to move in the form of SDLT.”

Spencer’s hopes don’t end there as she goes on to urge Reeves to support UK AI and fintech innovation as a way of boosting growth. “The Chancellor could expand R&D tax relief for fintechs and AI innovators.  This would cover start-ups scaling machine learning models for, say, fraud detection – or blockchain applications.  Spurring private investment would foster job creation in tech hubs and position the UK at the vanguard of Europe’s push into AI.

“Rachel Reeves could also look to introduce streamlined global talent visas for AI and fintech specialists, allocate something like 5,000 slots annually for fast-track processing under three weeks.  If she was looking to really foster growth, she could subsidise relocation grants for every hire to help families integrate.  We could complement this with partnerships with universities for upskilling Brits in data science.  These sorts of policies could help plug skill gaps and cement the UK’s status as a magnet for world-class innovators.”

While reforming taxation and supporting innovation are critical, Damien Druce, COO at Black & White Bridging argues that “cutting government spending” should be a central focus.  “After all, if the Chancellor got a grip on inflation, the Bank of England would then be in a position to cut the base rate harder and faster, supporting entrepreneurial property investors looking to develop and expand their portfolios.

“And shrinking the size of the state is not unreasonable: under current government plans, tax revenue is forecast to rise to 37.7% of GDP by 2027–28. At the budget in October 2024, the OBR forecast the tax burden would climb even higher, peaking at 38.3% in 2027/28. To put this in context, 37.7% of GDP by 2027–28, represents the highest level since current records began in 1948. We are spending too much and as a country, we are not living within our means.

“Sadly, the chances of this sclerotic Government or our chaotic chancellor getting to grips with bloated public spending seem very slim indeed.”

Druce acknowledges one recent relief for the sector, however: Reeves’ U-turn on income tax. “About the best that can be said of this shambles of a Budget is that Ms. Reeves’ U-turn on income tax took the heat off landlords who were set to foot the bill to restock the Treasury’s ailing coffers if income tax was increased. Not only would this have damaged the appeal of investing in rental property at a time when the country’s rental stock is shrinking despite growing demand, but it would force landlords to raise rents. Ultimately, that would mean tenants would be picking up the tab.

“Landlords are already leaving the sector in droves. Our own data recently revealed that 93,000 buy-to-let landlords will have left the rental market by the end of this year. But the private rental sector is vital to the country’s housing landscape, driving development and redevelopment of property across the country. Targeting this sector will only cause more landlords to sell up, more people to struggle finding affordable rental accommodation, and more ageing properties to sit uninhabited and in desperate need of investment and redevelopment.”

While property policy dominates the headlines, Gary Thompson, sales director at Asset Advantage, stressed the importance of supporting SMEs – which he calls “the engine room of the UK economy” – many of whom he claims are “still reeling from the full range of tax rises levied in last year’s Autumn Budget”.

“As the UK Budget approaches, the priority must be clear; SMEs need faster, fairer and more accessible funding routes. The brokers and businesses we speak to every day aren’t looking for subsidies, they’re looking for smart, commercially-minded finance partners who understand non-standard assets, new start ventures and business acquisitions. The Budget should recognise that the UK’s growth won’t come from the usual sources, it will come from giving ambitious SMEs the confidence to invest, expand and hire. That requires lower taxes and employment costs, and a funding landscape that moves at the pace of business, not bureaucracy.

“Our recent survey tells us that commercial brokers are seeing increasing interest and demand for flexible funding, whether that’s to fund new investments and expansion, or to facilitate an acquisition or MBO. Whether it’s entrepreneurs or their management teams, SMEs are clearly resilient with a real appetite to scale. The Government shouldn’t take this for granted and should do everything it can in the upcoming Budget to nurture this and support both brokers and funders to deliver on its mission of economic growth.”

As the Chancellor prepares to the deliver her Budget, the specialist finance sector faces a mix of opportunity and uncertainty. For lenders, brokers and investors, the Budget’s impact will be felt immediately, shaping borrowing decisions and appetite for risk moving into 2026. Reeves’ challenge will be a striking a balance between stimulating growth and mobility without adding new burdens to groups already under pressure.

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