The Budget And Your Properties/Mortgage with Sarah Grace [CPD Available]

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Mortgages just got more complicated for dentists, but not unworkable. We dig into what the latest budget actually changes for buy-to-let in personal names, how frozen tax bands quietly pull more rent into higher rates, and why the updated interest tax credits at 22, 42, and 47 percent matter for your cash flow. You’ll hear a clear-eyed view on the policy direction that nudges small landlords out while corporate landlords scale up—and the practical impact that shift has on rents, tenant stability, and long-term yields.

We also unpack where rates are heading right now. With bond markets warming to the budget, fixed-rate funding costs have eased, and lenders are sharpening two- and five-year fixes. That’s positive, but the last two years taught us how quickly markets can turn. Our strategy is simple and dentist-friendly: if your fix ends within six months, secure a product now to cap your risk, then switch to any lower rate if pricing improves before completion. It’s an option, not a commitment, and it turns uncertainty into leverage.

For higher-value homes, we outline the proposed mansion tax bands, valuation timing, and what to watch ahead of 2028. If you’re buying near the thresholds—especially in the South East—build the annual levy into your ownership maths today. Whether you’re remortgaging, purchasing a home, or weighing a buy-to-let, we cover documents to prepare, how to choose between two- and five-year fixes, and the red flags that make a rental deal too thin after tax.

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Disclaimer: All content on this channel is for education purposes only and does not constitute an investment recommendation or individual financial advice. For that, you should speak to a regulated, independent professional. The value of investments and the income from them can go down as well as up, so you may get back less than you invest. The views expressed on this channel may no longer be current. The information provided is not a personal recommendation for any particular investment. Tax treatment depends on individual circumstances and all tax rules may change in the future. If you are unsure about the suitability of an investment, you should speak to a regulated, independent professional. Investment figures quoted refer to simulated past performance and that past performance is not a reliable indicator of future results/performance.

Chapters

• 0:00 Setting The Mortgage Agenda
• 1:12 Budget Changes For Landlords
• 3:26 Why Government Favours Big Landlords
• 5:44 Rent Decisions And Tenant Turnover
• 6:52 Market Reaction And Fixed-Rate Moves
• 8:14 Base Rate Hopes And Stability
• 9:52 Mansion Tax Explainer
• 11:46 Action Steps For Renewals

Transcript

Dr James: 0:00

The budget was not as bad as we all expected, but what does it mean specifically for each and every hour for life? And that is definitely the philosophy that we have in this podcast today, whenever it comes to mortgages. And that's why I'm joined by mortgage experts. This is terror grace.

Sarah: 0:18

This is actually yeah.

Dr James: 0:20

Thank you, Sarah. This is TerraGris. And we're gonna be going through everything dentists need to know on the podcast today, whenever it comes to mortgages, so they can get the best deal for their prospective houses. Alright, we're cooking facts on mortgages and how us dentists can get the best deal and what do we need to know. And is now a good time to just go ahead and pull a trigger on a mortgage, all this stuff and more to be covered on the podcast today. I guess Sarah, Sarah needs no introduction, she's been on the podcast loads of time times. I guess Sarah, what Dentist would really need to know is what is the salient facts and changes from the budgets with the from the budget, sorry, uh, with regards to their properties, with regards to their mortgages, what are the high-level facts that we need to know? Maybe that's a good place to begin.

Sarah: 1:12

Yeah, so really um only it's only really affected uh by to let landlords, and that's that's sort of if you own any properties in your personal name and not via an SPV limited company. Um so the rental income, I know that they've not changed the tax rates, although they've frozen the bandings of um uh when you start paying tax or the higher rate taxes. Um that has changed for buy-to-let landlords if you own property in your personal name. So a basic rate taxpayer on rental income will uh pay 22%, and uh if you're a higher rate taxpayer, 42%, uh, and then the additional rate taxpayer 47%. Now you can offset in your interest uh tax credits. Um that is also increasing to 22, 42, and 47%, because that wasn't actually clear when they first announced the budget, whether it was just staying um at 20%. So sorry, if you're a higher rate taxpayer, you only get you will get the 22% relief on the mortgage interest charge. Uh so that that's sort of remaining the same, albeit it's going to be 22% rather than 20%. Um so I think I think it's just you know, it's another hope for landlords. We had the stamp duty increases last year if you're purchasing uh from additional property from 3% to 5%. So it is just really clear that the uh government uh doesn't want personal landlords to own, you know, private landlords to own Bitolets really. They're trying to price the Bitolet landlord, I think, out of the market.

Dr James: 3:23

And what's your theory on that one?

Sarah: 3:26

Um, I think that um there's a lot of institutional money, the Black Rocks, big um, you know, funds that have got billions to spend. I think they're buying uh a lot of the lower value properties up in the northeast uh and that sort of thing and pushing their those prices up. Um I think the government doesn't want to deal with those little individual landlords, they just want to have these large corporate landlords, um, which you know just means that I think that going forward, eventually the the tenants will start paying more, you know, more rent because I know I'm a buy to let landlord, I've not increased my rent for my tenants for two, three years now. It's just like they look after the place, they make me enough money. Um, you know, perhaps I should be a bit more commercial, but what I don't want to do is put the rents up. I could perhaps get 50 quid a month more. Um, but what I don't want to risk losing those tenants and then having to find a new tenant, pay the management agents to find a new tenant and all of that all over again. And and you know that there's there's costs involved with that. So for the sake of 600 quid a year, uh I'm happy for them to have the the uh the property at a lower value. Okay, when when they decide to leave, I'll then charge the market rent and so on. But on average, I would say that the turnover of my rentals is like every uh you're getting a new tenant every two, three years. Whereas I'll tell you what, those institutional landlords they will be increasing every year by inflation because they're running it as a business. Uh so I think that eventually it just means that tenants are going to pay more rent.

Dr James: 5:27

Interesting, interesting, interesting. Always good to hear some conjecture and personal opinion on the podcast. Uh, you know, from the point of view of how can we say this, hearing uh alternative opinions and uh your your personal thoughts on what might be out there, which is really cool. Anyway, Sarah, let me see here. So we're currently shooting this podcast, and that is on the 28th of November, and the budget was, of course, two days ago on the 26th. So dentists have obviously had some time for this to sink in. Now, is your phone ringing off the hook? How are people reacting to this?

Sarah: 6:02

Yeah, it's funny. We we had uh we had a little bit of a sort of October, November, you know, uh the sales inquiries dropped off a little bit. We're always busy with remortgages or people's rates coming up for renewal. Um, but the purchase inquiries definitely dropped off. But like literally today, I've had three people that have uh said I've had my mortgage offer, can you sort out my mortgage? Um, so people were waiting to see what happens, which we had exactly the same October last year when we although the budget was a little bit earlier. Um people wait to see what happens, and um, and obviously that there hasn't been any stamp duty changes, which I think was what people were concerned about. Um so it's just like right, well, let's get on. Um, fortunately, the bond markets, um, which has a direct impact on fixed rates, they've actually been in favour of the budget. So um in the last couple of days, we've seen um basis points dropping by about five points. So to as we speak today, uh lenders can buy two-year fixed rate funds at 3.3% and um five-year fixed rate funds at 3.63, which obviously then they have their margin, which they add on on top of that. Um so I have got some lenders, you know, with two-year fixed rates at three point three point five five, I think is the lowest two-year fix rate we can get today. So so it that's all positive. So long may that that continue, really.

Dr James: 7:50

Yeah, that's not too bad at all, really. That's really not too bad at all.

Sarah: 7:54

No, no, um, it it it it is good, and then I think that uh the budget has also been as I said received quite well. I think they there will be pressure on the Bank of England to reduce their rates, their their next meeting on the 18th of December, whether whether we'll have a little Christmas bonus of the bank base rate uh reducing below four percent, which will be the first time in a long, long time, over two years. Um that'll be great. Uh, but then the sort of long pro long-term prediction sort of for next year is we hopefully see a bank base rate of three and a half percent, which is half a percent lower than it is today.

Dr James: 8:40

Wow. All right, well, let's just see what happens on that one, I guess, because predicting obviously interesting here, uh you know, wisdom, how can we say foresight? Uh, but uh interest rate is notoriously uh difficult to predict. Uh, but certainly the signs are positive, shall we say that?

Sarah: 8:58

Yes, yes, they they are. Uh but obviously in the last two years, having you know gone through the Liz Trust thingy, um, you realise that you know this week might might all be looking positive. Next week, we could be looking at uh a totally different set of uh rules. So um so hopefully, um, yeah, you know, the market needs stability um for for people to have the confidence and it looks like the markets are thinking that the budget, you know, they are they are marking it as a confidence sort of uh budget. So so hopefully we'll we'll just have a bit of stability and uh and a stable rate so people can budget well.

Dr James: 9:47

Very nice. Sarah, anything else to cover that's relevant?

Sarah: 9:52

Um just the mansion tax for all those people that have uh properties worth over two million, or I think it's F G and H bandins on their council tax. Um I believe they uh their properties are going to be valued in sometime in 2026. I don't know whether you'll be able to appeal that valuation, but if you're in those tax bandings, um council tax bandings, you will uh have a value done. And uh if they feel that your property is worth between two and two and a half million, you'll pay two and a half K a year in addition to your council tax. Two and a half to three and a half is three and a half thousand a year, and three and a half to five mil is five thousand a year, and anything over five mil is seven and a half thousand a year, which I believe is just going to be paid directly to central government and not your local uh council tax. Uh, but I don't know, waiting to hear on that.

Dr James: 11:01

Interesting. Wow, so it's just this extra bill that you get through the post every year, I guess. Yes.

Sarah: 11:07

Yeah.

Dr James: 11:10

Have they given any indication as to how it is it literally just a letter in the post or yeah, I don't I don't know.

Sarah: 11:16

I don't think they really know yet, but um this won't come into effect until April 2028. So we've got two years. Don't forget April 28th will be a year before the next general election. So whether it actually will come into uh course, I don't know, but I suppose majority of those people potentially are not going to be labeled voters. But you know, if you've got a property in the southeast, two million isn't an awful lot.

Dr James: 11:52

There we are. Sarah, would you say that those are the salient points or anything else to consider?

Sarah: 11:58

Yeah, no, I don't I just think that um, you know, as always, um if you if you've got fixed rate coming up for renewal within the next six months, reach reach out to your mortgage broker, secure a rate early, uh, because it can always be changed. So if that lender reduces their rates, you can always jump onto a lower rate. Um, but then if if rates do go upwards, which we have seen over the last sort of two, three years, rates going down and then them going back up, this is fixed rates, by the way. Um, lock in, lock in a deal early. Um, you can always change it, but uh if rates go against you, uh you could miss the boat.