Was all the fanfare worth it? Did the much-vaunted Autumn Budget bring all you had wanted – or considerably less? Let’s take a look behind the headlines to help gauge whether the Chancellor’s latest moves herald good or bad UK property news.
The Autumn Budget and the housing market
Speculation had been rife, and the market reacted gloomily to predictions of a property tax on homes worth £500,000 or more. In the event, the Chancellor held back from any such move, although she did announce a forthcoming “mansion tax” from April 2028 on homes valued at more than £2 million.
As the online listings website Zoopla had it in its report on the 26th of November, the mansion tax was probably the headline feature of the budget – although it is expected to impact only 0.5% of all homes in the UK, with the great majority (85%) of those in either London or the surrounding south east of England.
Another pre-budget cloud on the horizon was the prospect of higher Stamp Duty rates on house purchases. As the website Rightmove noted in its account of the budget details, there was no increase in the tax, despite previous, widely circulated rumours.
Though the budget might have brought good news for the majority of homeowners and those who have escaped a dreaded increase in Stamp Duty, there was considerably less for private sector landlords to celebrate.
The Chancellor announced significant new income tax increases for landlords. With effect from April 2027, there will be a separate, higher rate of income tax on profits from buy to let businesses throughout England, Wales, and Northern Ireland.
The tax bands for income from such property will be as follows:
- a basic rate of income tax of 22% – a 2% increase on the current 20%;
- a higher rate of income tax of 42% – also a 2% increase on the current 40%; and
- a tax on the additional rate band of 47% – also up 2% on the current 45%.
Increased rates of income tax will be a significant blow to private sector landlords who already feel disadvantaged by previous changes to the tax regime, including the abolition of tax relief on buy to let mortgage interest payments.
“Boxing Day bounce” expected to boost housing market
Boxing Day may be a day for indulgently scrolling through property listings on the internet. But a story in the Independent newspaper on the 1st of December suggests that otherwise idle searching could, in fact, translate into moves to make a purchase – and so provide a boost to the housing market.
According to the press report, Rightmove experienced a surge in activity on its listings website on Boxing Day. However, Rightmove’s survey of more than 10,000 prospective homebuyers indicated that 20% were awaiting the outcome of the Autumn Budget before making a concerted move.
Annual UK house price growth slowed in November
In its edition of the 2nd of December, the London Evening Standard revealed that house prices are currently rising at a rate of 1.8% a month – a drop from October’s 2.4%.
Although the average price of a home in the UK has now climbed to £272,998, the relative slowdown in the rate of increase may improve affordability for many buyers.
