Autumn Budget 2025: Property Industry Reacts
The Autumn Budget has confirmed a series of major housing and property tax reforms that will reshape the market over the coming years. The measures place particular emphasis on higher value homes, revised council tax structures and long term planning reform.
Below is a breakdown of the announcements that directly affect the property market, together with reaction from across the sector.
Confirmed Measures
Higher Value Property Taxation: New Surcharges
The government has confirmed that homes valued above £2 million will be subject to a new annual surcharge. The measure will increase the tax burden on higher value properties, with the Treasury positioning it as a way to ensure that wealthier households contribute a greater share of property related revenues.
Although branded as a targeted levy, industry observers view the move as a mansion tax in all but name. The additional recurring charge will fall heavily on London and the South East, where the majority of £2 million plus homes are located, and will increase ownership costs at the top end of the market from 2028 onwards.
Reaction
Islay Robinson, CEO of Enness Global, commented:
“Budget Day has come and, as usual, the Chancellor has left the nation’s high net worths with a lump of coal in the form of yet another tax raid. The new surcharge on homes above £2 million adds further pressure to a part of the market that already carries a disproportionate share of the burden.
However, what has been far more damaging is the fact that the entire market spent weeks frozen in anticipation of sweeping property tax reforms that never arrived. Transaction momentum stalled, confidence dipped and deals slowed for no reason other than speculation that the government allowed to run unchecked.
“The OBR forecasts only emphasise how little this Budget has done to tackle the real structural issues. Mortgage rates are expected to hover around five percent for much of the decade, transactions are forecast to fall materially and landlords face a continued squeeze as taxes on property and investment income rise.
Reduced investment means reduced rental supply, which pushes rents higher, lowers liquidity and ultimately forces households to stay put rather than move. Yet house prices are still projected to drift upwards because supply remains chronically constrained. The UK remains investable, but this Budget has done nothing to improve clarity or confidence, and the long term direction of travel continues to be higher taxes, higher costs and lower mobility.”
Marc von Grundherr, Director of Benham and Reeves, commented:
“These measures will fall overwhelmingly on London, where the majority of £2 million plus homes are located. The capital has already endured years of pressure at the top end and today’s announcement simply adds more cost to a market that is still trying to regain its footing.
International investment has slowed sharply and this will do little to revive confidence. If the government wants London to remain globally competitive, it must recognise that the prime market underpins activity and tax generation across the entire housing chain. Targeting it repeatedly will only weaken the foundation.”
Jonathan Samuels, CEO of Octane Capital, commented:
“The focus on raising revenue from high value homes is clear, but tax changes alone will not deliver a healthier market.
Buyers and investors still face significant challenges in accessing finance, particularly if their circumstances fall outside the narrow definitions used by mainstream banks.
A diverse and stable lending landscape remains essential for keeping transactions moving.”
Increases to Property Income, Dividend and Savings Taxation
Alongside the main property announcements, the OBR’s updated fiscal tables confirm that tax rates on property income, savings income and dividend income will rise by two percentage points over the forecast period. These increases were not headline announcements within the Budget speech, but they form part of the government’s medium term revenue strategy.
The rise in property income tax will directly affect landlords operating outside company structures, reducing net rental returns at a time when many are already facing increased regulatory and operational pressures. Higher taxes on savings and dividends will also impact investors who rely on these income streams, contributing to a broader decline in net investment returns across the private rented and wider property sectors.
These changes are expected to place further pressure on smaller landlords and private investors, potentially reducing participation in the sector and affecting the supply of available rental stock. The measures also reinforce the shift toward a higher tax environment for property related income over the coming years.
Reaction
Sián Hemming-Metcalfe, Operations Director at Inventory Base, commented:
“Landlords may have avoided a National Insurance surcharge, but the two percent increase in property income tax will still land heavily with those operating within the rental sector. Smaller individual landlords are already working through one of the biggest operational shifts the sector has seen in years as the Renter’s Rights Act beds in. Many are investing in upgraded processes, property standards and compliance systems, and this extra tax cost arrives precisely when their outgoings are rising rather than falling.
Although incorporated landlords may absorb the change more easily, the amateur and accidental landlords who rely on rental income as part of their household finances are far more exposed. They tend to act conservatively when the rules keep shifting, and they are often the first to reduce investment or withdraw from the sector entirely.
In a rental market that is already struggling with a chronic lack of stock, anything that accelerates that trend will be felt by tenants long before it is felt by policymakers. Stability, not additional pressure, is what the sector needs now.”
Sam Humphreys, Head of M&A at Dwelly, commented:
“The rise in property income and dividends tax presents all types of landlords with yet another obstacle to adapt to at a time when they are already absorbing significant operational changes under the Renter’s Rights Act. Despite this additional pressure, the sector remains profitable, but the margin for error is undoubtedly narrowing. Smaller individual landlords, in particular, now face a more complex environment where every regulatory and financial shift has a meaningful impact on day to day decision making.
What this change really highlights is the growing need for professional guidance. Amateur and accidental landlords will be even more reliant on the expertise of their letting agents to help them navigate the increasing administrative, compliance and operational demands of modern property management.
The rental market is evolving quickly and remains a fundamentally strong asset class, but support and clarity are becoming more essential with each policy adjustment. Ensuring landlords have access to the right advice will be key to maintaining confidence and performance in the years ahead.”
Housing Supply and Planning Reform
The Chancellor has reinforced the government’s long term intention to deliver planning reform aimed at increasing housing supply. The updated OBR modelling incorporates the assumption that successful reforms could gradually lift annual housebuilding and provide a modest easing of price pressures over the next decade.
Reaction
Adam Day, Head of eXp UK and Europe, commented:
“When it comes to housing delivery, the industry is inclined to take government claims with a bag of salt rather than a pinch. Time and time again we have heard recycled rhetoric about boosting housing supply and time and time again we have watched successive governments fall well short of their own targets.
The commitment to long term planning reform is welcome in principle, but the sector now needs to see genuine delivery rather than another round of ambition without action.
New housing supply is vital in preventing prices from becoming artificially inflated and in creating genuine routes into homeownership for aspiring buyers. Without a steady pipeline of homes, affordability remains stretched, mobility stalls and the next generation struggles to take its first steps onto the ladder. If the government is serious about addressing the structural issues in the housing market, then it is time to walk the walk instead of simply talking the talk.”
What we didn’t see
Despite extensive speculation, several major policy changes did not materialise in the Budget.
Stamp Duty Land Tax: No Reform or Relief
There are no changes to Stamp Duty. Thresholds and rates remain untouched.
Reaction
Damien Jefferies, Founder of Jefferies London, commented:
“It is disappointing to see homebuyers ignored yet again. There was a real opportunity to lift market mobility with a Budget Day boost by way of Stamp Duty reform but, as we’ve seen time and time again, the government has turned its back on those struggling to climb the property ladder.
Stamp duty remains one of the most obstructive elements of the entire housing system, slowing transactions at every level and adding unnecessary friction to the process of moving home. By leaving it untouched, the Chancellor has failed to address one of the most significant barriers facing buyers and sellers in what is already a cautious market.
Our own analysis shows that buyers in England have paid more than £62 billion in stamp duty over the past decade, with London shouldering a disproportionately large share of that burden. The capital’s market has been fatigued for years, and reform to this outdated tax could have played a vital role in re energising activity and restoring confidence. Instead, the government has chosen not to take action, leaving households to contend with the same high upfront costs and the same constraints on mobility that have held the market back for far too long.”
Verona Frankish, CEO of Yopa, commented:
“After months of anticipation, today’s Budget will bring nothing but frustration for the nation’s homebuyers, who were hoping to see some form of stamp duty reform, at the very least.
Stamp duty is one of the most significant financial hurdles in the home buying process and the property market needs permanent reform in this respect, not continued inertia.
The property market has stood strong over the course of the last year, but no news is certainly not good news in this instance and won’t light the touch paper with respect to driving buyer demand levels.”
Colby Short, CEO of GetAgent, commented:
“From the conversations we are having every day with our partner agents, the appetite from buyers and sellers has remained consistent to a degree, but the market has been noticeably quieter in recent months, as is often the case in the lead up to big set piece moments like the Budget.
Many households were waiting to see whether stamp duty would be addressed before committing to a move, but with no reform forthcoming, they are now left navigating the same high upfront costs that prove to be such a significant barrier to homeownership for so many.
The absence of any stamp duty relief means we are unlikely to see the release of pent up demand that could have helped lift momentum going into 2026. With clarity at least restored, many will begin to move again, but without action on the upfront cost of moving, we should expect progress to be steady rather than swift.”
Capital Gains Tax: No CGT on Main Residences
The Budget confirms that CGT will not apply to primary homes. Proposals to tax main residences above certain thresholds have been ruled out.
Reaction
Shepherd Ncube, CEO of Springbok Properties, commented:
“The rumours around Capital Gains Tax created hesitation throughout the market and delayed thousands of transactions, so today’s clarity will come as a relief to homeowners. Had the government introduced a Capital Gains Tax charge on main residences, it would have clogged the market from the top down and trapped people in homes they no longer wished to occupy.
Confirming that the exemption remains intact removes a major source of uncertainty and gives buyers and sellers the confidence to move forward again.
It is also fair to say that a great deal of damage has already been done by way of market stagnation.
Sellers have been sitting with little to no interest in their homes for months, and those who have managed to find a buyer have faced a heightened risk of instability, with fall throughs becoming increasingly common. The constant speculation around property taxation has created real anxiety at a time when the market needed stability. Today’s announcement will help, but the sector now needs a sustained period of certainty if momentum is to properly return.”
Market Outlook and OBR Assessment
The OBR forecasts that transactions will stabilise in 2026, with the burden of property taxation shifting more heavily toward the top of the market. Supply side measures may support affordability in the long term, though much depends on delivery and mortgage market conditions.
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