Budget 2025

Fuller Gilbert takes a look at the Autumn 2025 Budget announcement by the Chancellor, Rachel Reeves,  and assesses what impact this could have on the property market…

Stamp Duty Held Steady

Chancellor Rachel Reeves’ Autumn Budget confirmed that Stamp Duty Land Tax (SDLT) would remain unchanged, providing welcome stability for mainstream buyers. Existing thresholds and first-time buyer reliefs stay in place, avoiding any increase in upfront costs and giving ordinary purchasers - especially in London - some breathing room amid high mortgage rates.

Mansion Tax Arrives in 2028

The calm at the entry and mid-market level sits in contrast with new pressures at the top end. From April 2028, the government will introduce a High-Value Council Tax Surcharge, widely described as a “mansion tax,” applying to homes valued at £2 million and above.

Annual charges will start at around £2,500 and rise to over £7,500 for properties worth more than £5 million, with bands indexed to inflation. As a large percentage of high-value homes are located in London, the capital’s wealthiest boroughs will seemingly bear the brunt. Analysts anticipate the measures may cool demand for luxury homes, encourage early sales, and potentially soften prime London property prices.

Dominic Pasqua, Office Head Wimbledon   Village:

“Although widely unpopular, the new ‘Mansion Tax’ - to be applied to properties valued over £2,000,000 - may well be the most favourable outcome property owners could have hoped for in this Budget. This is especially true given the speculation over the past three to four months, which included proposals such as an annual levy on homes worth more than £500,000 and even the introduction of capital gains tax on primary residences.

“With the uncertainty surrounding property taxes now resolved - and the measures proving far less punitive than feared - we anticipate the market will regain momentum. That said, activity may remain subdued until January, as the run-up to Christmas is traditionally a quieter period. Looking ahead, with interest rates expected to fall in the coming months, we foresee a very active spring market.”

Landlords Face New Tax Burden

From April 2027, landlords will see a 2-percentage-point increase in tax on rental income, reducing net returns for buy-to-let investors. In a market where margins are already tight, some landlords may choose to downsize their portfolios or exit altogether.

Impact on Renters

This poses risks for London’s renters. A potentially shrinking pool of private rental properties could intensify competition and push rents even higher, worsening affordability in a city already struggling with soaring tenancy costs.

Mainstream Market: Neutral but Fragile

For mainstream buyers and movers, the Budget is more neutral. With Stamp Duty held steady and new funding pledged for affordable housing delivery, the wider market may see modest support - though London’s underlying affordability crisis remains largely unaddressed.

A Divided Market

The overall effect is a more polarised property landscape: relative stability for those buying below £1.5 million, but growing uncertainty for landlords and owners of high-value homes. London, with its heavy dependence on both luxury real estate and the private rental sector, stands to feel these changes more acutely than anywhere else in the country.

This article is for informational purposes. Always seek professional advice before making any property decisions.