Budget 2025 - How the Autumn Budget Impacts the UK Property Market

The Autumn Budget 2025 will be remembered for the unprecedented number of leaks in the weeks and minutes leading up to it. Now that the Budget has finally been delivered, here is what actually did and didn’t happen from a property point of view and how it could shape the market heading into 2026.

1. Council Tax and the much-rumoured Mansion Tax

Many expected a major overhaul of Council Tax and a new mansion tax on homes worth over £500,000. This did not happen. Instead, a new Higher Value Council Tax surcharge has been introduced. It applies only to homes worth over £2 million, starting at £2,500 per year and rising to £5,000 for homes over £5 million.

2. Stamp Duty

Despite speculation that the Chancellor might make changes to help stimulate the housing market, no alterations were made to Stamp Duty this year.

3. Capital Gains Tax

There were rumours of big CGT changes, including the possibility of a further rise or limits on main residence relief. None of these came to pass. CGT on property remains unchanged, which will be welcome news for second homeowners and investors.

4. Income Tax on earnings

Rates did not rise, despite widespread leaks suggesting they might. However, the freeze on personal tax allowances and thresholds has been extended until 2030/31. This creates fiscal drag, meaning many will effectively pay more tax over time, which could impact affordability for buyers and movers.

5. Income Tax on savings and property income

Instead of adding National Insurance to rental income, the Chancellor increased Income Tax on savings and property income by 2 percent. This affects buy-to-let landlords and anyone with savings income.

How might the Budget affect the property market in 2026?

Experts estimate the Budget raises an additional £26 billion in tax. While the measures are indirect, households will likely feel a little worse off. Even so, certainty is positive for the property market. Now that the Budget is out, buyers and sellers can plan with more confidence. Many analysts expect interest rates to fall again when the Bank of England meets on 18 December, with mortgage costs predicted to ease further in 2026. The new Higher Value Council Tax surcharge will not affect the majority of buyers and may even boost interest in prestige homes under £2 million.

For Homebuyers

With greater clarity and the likelihood of falling interest rates next year, this may be a good time to start planning your move.

For Sellers

Well-presented and accurately priced homes continue to attract strong interest regardless of wider economic conditions. If you’re considering selling, this could be an ideal moment to request an updated valuation.

For Landlords

The 2025 Budget marks another significant moment for landlords. The 2 percent rise in Income Tax on rental income comes alongside previous tax changes and the forthcoming Renters’ Rights Act, which takes effect on 1 May 2026. Landlords should review their portfolios and consider their next steps.

We hope you found this Budget 2025 roundup helpful. Please feel free to share it with anyone who may benefit.

(Please note that some taxes differ outside England, such as Stamp Duty and Income Tax in Scotland and Wales.)