The dust is settling on the 2025 Autumn Budget, and property market experts are now assessing what the announced measures mean for house prices, buyer behaviour, and rental demand in the coming year. Whether you're a landlord, tenant, or prospective buyer, understanding these trends will help you make smarter decisions.
Clarity brings market stability
The most significant development is the confirmation that there will be no annual tax on properties above £500,000. This brings clarity to owners of roughly 210,000 homes currently on the market above this threshold. With certainty established, buyer interest is expected to strengthen heading into 2026, particularly across London and southern England.
The existing stamp duty system remains intact, providing continuity for the market. Market analysts expect this clarity to support renewed activity after a period of waiting. Properties priced appropriately for current conditions will continue to transact, and buyers with financing in place can move forward with confidence.
What landlords need to consider
From April 2027, property income tax rates will adjust by 2 percentage points across all bands, basic rate moving to 22%, higher rate to 42%, and additional rate to 47%. This follows last year's stamp duty adjustment on additional homes (from 3% to 5%), alongside the Renters' Rights Act and energy efficiency regulations forming part of the shifting landlord landscape.
Significantly, rents have risen 25% over the last five years, which has supported landlord income during this period of change. This rental growth has provided returns that help landlords navigate the new regulatory and taxation environment.
Landlords can focus on properties with strong rental demand fundamentals, good employment prospects, transport links, and practical layouts. The April 2027 implementation date provides time to review portfolio performance and consider strategic adjustments where beneficial.
The targeted mansion tax
From 2028, a high-value council tax surcharge will apply to properties worth over £2m, an estimated 0.5% of UK homes, with 85% in London and the South East. The annual charge of £2,500 for properties between £2m-£5m, rising to £7,500 above £5m, is more modest than some predictions suggested.
For a majority of the market, 99.5% of homes, this measure will have no impact. The targeted nature means typical buyers, sellers, and homeowners can proceed with their plans unchanged.
The rental market perspective
For tenants, the 25% rent growth over five years reflects strong underlying demand in the rental sector. As buyer confidence returns following budget clarity, the balance between renting and purchasing becomes clearer for those weighing their options.
With the existing stamp duty system maintained and no new barriers to homeownership introduced, the path to purchase remains consistent with pre-budget conditions. This allows for informed decision-making based on personal circumstances and financial readiness.
The year ahead
The post-budget outlook centres on targeted adjustments rather than dramatic change. The confirmation about the £500,000 threshold removes uncertainty for 210,000 homes currently on the market. The existing stamp duty system provides continuity for most market participants. Targeted adjustments affect specific segments, 0.5% of homes above £2m and landlords planning for April 2027 changes.
This creates a more predictable environment for planning. Buyers gain certainty about purchase costs. Sellers understand the landscape for marketing their properties. Landlords have a clear timeline for adjusting to new income tax rates. Homeowners below £2m see no changes to their position.
The market rewards those who understand these specifics and act on clear information. With speculation about sweeping property tax changes now resolved, participants can make decisions based on actual measures rather than anticipated scenarios.
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