The UK Autumn Budget: what’s ahead for buyers, sellers, landlords and investors?

Home movers, landlords and investors with an eye on the capital’s property market have their fingers crossed for 26th November. That’s the date when Chancellor Rachel Reeves will deliver the UK Autumn Budget.  

We should start by saying that no official announcements have yet been made. But there has been fevered speculation about what to expect when the Chancellor stands up in parliament to reveal her Budget plans. Rumours are circulating about a raft of UK property tax reforms together with a National Insurance levy for landlords. 

How is the budget affecting house prices in the UK? 

Speculation is already impacting the property market, as buyers and sellers hold back to see what will happen. According to Nationwide, the rate of property price growth fell by 2.1 per cent in August.  

As conjecture builds around potential Budget outcomes, the UK is experiencing cooling buyer demand for homes priced at £500,000 and above. This will inevitably have a bigger impact on London and the south east, where property values are generally higher.  

What are the key changes under review? 

Under the new reforms proposed, Council Tax and Stamp Duty will be replaced by a single, annual levy based on a home’s current value. This is a much-anticipated move away from our present Council Tax ‘banding’ system, which reflects valuations made in 1991. 

A ‘proportional’ local tax: this tax is meant to fund local services and would be payable by property owners on homes worth up to £500,000.  

The goal is to make property taxes more “proportional” in terms of a property’s value, so higher-value homes will pay more. This model avoids the burden of large, upfront payments such as Stamp Duty by introducing smaller, regular charges that can be more easily managed. 

An annual, national home tax: this would be brought in for higher value, owner-occupied properties. No charges have yet been confirmed, but a leading think-tank has suggested levying 0.54 per cent on a value between £500,000 and £1 million, with a higher rate of 0.278 per cent for values above £1m. Some reports have indicated that these rates could increase with inflation. 

Although the tax would accrue on a yearly basis, it would only become payable at the point of sale, effectively replacing Stamp Duty. In this way sellers, instead of buyers, would pay the tax due on properties that sold for over £500,000. Sources say it is unlikely that sellers who have recently paid Stamp Duty on their home would be expected to pay again when they sell. 

Changes to Capital Gains Tax: Capital Gains Tax (CGT) is charged after an asset has increased in value: the tax is calculated on the profit you stand to make when you sell. Currently, where property is concerned, main homes are exempt from CGT and the tax is only charged on additional or second homes. There are rumours that the Chancellor may impose CGT on higher value homes, at a basic rate of 18 per cent or 24 per cent for higher rate taxpayers. Critics have argued that this could reduce the volume of sales at the top end of the market. 

National insurance (NI) on rental income: If this goes ahead, landlords could see rental income treated in the same way as income from employment.  Proposals suggest NI is paid at the basic rate of 20 per cent with an additional rate of 8 per cent for rental earnings above £50,270 a year. If NI on rental profits is announced in November's Budget, it could become effective from April 2026. Some reports have suggested that NI would be levied on independent landlords, while landlord businesses would be exempt.

How will the proposed changes affect my plans? 

The abolition of Stamp Duty is designed to create more movement and growth in the property market. It will be encouraging news for first time buyers, but experts warn that it could trigger a market slowdown in the short term. 

Amongst other changes we could also see new procedures applied to house sales.   Proposals include requiring the seller, not the buyer, to provide search and survey reports on their property. Binding contracts could also be drawn up to prevent the collapse of property transactions. In the UK between 30-40 per cent of sales fall through each year, wasting time and money, so this could be beneficial for buyers and sellers. 

While there is much to celebrate in the proposed reforms, there are also developments that could prove less palatable for London homeowners. When the full details finally emerge from the Chancellor’s red box, we’ll have a clearer picture of where the property market is heading. 

At Daniel Cobb, we make it a priority to stay up to date with the latest developments, so we can advise and support our customers. If you need help or advice, don’t hesitate to contact the sales and lettings teams at our offices in Westminster, London Bridge or Kennington.