Autumn 2026 Budget Analysis

Fuller Gilbert takes a look at the key housing, planning and property tax measures announced in the Autumn Budget 2026 and what they mean for London's property market.

After months of speculation, the Chancellor's Autumn Budget has provided greater clarity for buyers, sellers, landlords and investors across London's property market

For the housing sector, the Budget contains several significant measures, including the confirmation of the new Your First Home scheme, additional funding for affordable housing and further planning reforms aimed at supporting future development. Alongside these measures, the Government has also announced tax changes affecting landlords and property investors. These announcements arrive at a time when affordability remains stretched, borrowing costs remain elevated and housing supply continues to lag demand in many parts of the capital.

Your First Home Scheme Confirmed

One of the Budget's headline housing measures is the formal confirmation of the £4.7 billion Your First Home scheme, which the Government expects will help around 70,000 households onto the housing ladder.

The scheme will provide government equity loans of up to 20%, require a minimum deposit of 2.5%, and offer a five-year interest-free period before charges begin.

For London buyers, household income caps have been set at £140,000, with property price caps of £650,000 in Inner London and £500,000 in Outer London. Pre-registration is expected to open by the end of December 2026, with applications opening in February 2027 and the first loans available from April 2027.

For aspiring homeowners struggling to raise a deposit, the scheme represents one of the most significant homeownership initiatives announced in recent years.

More Investment in Housing

The Government has committed an additional £1.5 billion to help deliver around 10,000 social and affordable homes in England. This takes total investment in the Social and Affordable Homes Programme to more than £40 billion over ten years, with a particular focus on Social Rent and council housing.

The Budget also introduces VAT relief on land sold to registered social housing providers and extends preferential Public Works Loan Board borrowing rates for council housebuilding for a further year.

While the practical impact will take time to filter through, these measures signal a continued commitment to increasing housing supply across both the affordable and private sectors.

Planning and Development

The Government has confirmed that it will not introduce major changes to building regulations during the remainder of this Parliament, other than measures relating to building safety.

The Budget also introduces an exemption from Biodiversity Net Gain requirements for residential brownfield developments on sites of up to 1.5 hectares, helping to reduce costs and complexity for certain schemes.

In addition, local planning authorities will be required to digitise and publish key planning documents by the end of 2027, while the Government intends to make its AI-powered planning platform, PlanAssist, available to councils across England.

While unlikely to have an immediate impact, these measures are designed to reduce development barriers and support future housing delivery.

Tax Changes Affecting Landlords and Investors

One of the most significant announcements for landlords and property investors is the increase in the rates of income tax applied to property income from 6 April 2027.

From April 2027, the Government will increase the rates of income tax applied to property income. Under the new regime:

• The property basic rate will be 24% (income of £12,571 to £50,270)
• The property higher rate will be 44% (income of £50,271 to £125,140)
• The property additional rate will be 49% (income over £125,140)

The changes will align with the standard UK income tax bands and apply across England, Wales and Northern Ireland.

The Budget also confirms a reduction in the Business Asset Disposal Relief (BADR) lifetime limit from £1 million to £500,000 from April 2027.

While the Government stopped short of introducing some of the more substantial Capital Gains Tax reforms that had been widely discussed before the Budget, landlords and investors will need to assess how the higher taxation of property income may affect future returns. For many investors, the changes reinforce the importance of reviewing investment structures, projected yields and longer-term portfolio strategy.

Support for Future Homeowners

Alongside the Your First Home scheme, the Government has announced several measures designed to support homeownership and long-term saving.

The annual Cash ISA allowance will remain at £20,000.

A new First Time Buyer ISA will be introduced from April 2029, allowing contributions of up to £4,000 per year with a 25% Government bonus towards the purchase of a first home.

The Budget also reduces the withdrawal charge on Lifetime ISA funds used to purchase properties above the current £450,000 cap from 25% to 20%, effective from 29 October 2026.

What Does It Mean for the London Market?

The Budget is unlikely to transform market conditions overnight. Affordability remains stretched, borrowing costs remain elevated and wider economic uncertainty has not disappeared.

However, the confirmation of the Your First Home scheme removes one of the biggest uncertainties facing first-time buyers and provides a clearer route into homeownership for many households. Additional housing investment and planning reforms should also support future housing supply, although the effects are likely to emerge gradually.

For landlords and investors, attention will inevitably focus on the new tax measures affecting property income and how they influence future investment decisions and portfolio returns.

Conclusion

The 2026 Autumn Budget delivers a mixed but broadly constructive package for the housing market.

The confirmation of the Your First Home scheme, additional affordable housing funding and planning reforms provide support for future housing delivery and homeownership. At the same time, landlords and investors face higher taxation on property income and changes that may affect future returns.

For London's property market, the Budget is unlikely to transform conditions overnight. Affordability pressures remain, mortgage costs remain elevated and supply constraints persist. However, the confirmation of key housing measures and the removal of much of the recent policy uncertainty provide a clearer backdrop against which buyers, sellers, landlords and developers can make decisions.

In a market that has spent much of the year waiting for clarity, that certainty may prove to be one of the Budget's most significant outcomes.

Source note: This article draws on information published within Budget 2026: Breathing Space for Today, Fresh Hope for the Future, together with accompanying Government announcements and supporting Budget documentation.

Disclaimer: This article is provided for general information purposes only and does not constitute financial, investment, tax or legal advice. Readers should seek independent professional advice before making property, investment or taxation decisions. Market commentary and policy interpretations are based on information available at the date of publication and may be subject to change.

*Business Asset Disposal Relief (BADR) - formerly known as Entrepreneurs' Relief - is a UK tax relief that loewres the rate of Capital Gains Tax when you sell, close or dispose of all or part of your business.