UK Budget Reaction: What Today’s Announcements Mean for the Property Market
Today’s Budget has arrived following one of the most uncertain run-ups we’ve seen in years. The shifting Budget date and limited early detail, created hesitation across the UK property market, particularly among potential sellers waiting to understand how Government policy might impact them. Now that Rachel Reeves has outlined the key changes, we have a clearer picture of what this means for homeowners, buyers, and landlords as we move towards the end of 2025.
A Slower Market Ahead of the Budget
Uncertainty has been the defining theme of recent weeks. Across the areas Yorkshire, the number of new property listings has been around 15% lower than the same period last year. This reflects how many sellers chose to delay bringing their homes to market until the Budget was confirmed.
However, demand has remained strong. Sales agreed, when measured as a percentage of available stock, have continued to perform consistently with earlier this year. This shows that buyers are still motivated — the hesitation has been on the supply side. With today’s announcements now in place, we expect seller confidence to begin returning.
1. Mansion Tax UK: What the New Charges Mean
The largest headline for the housing sector is the introduction of a mansion tax for properties valued at £2 million and above. Due to come into force in 2028, the Government will begin valuing properties over the next few years to determine which fall into scope.
Proposed mansion tax charges include:
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£2 million+ properties: £2,500 annual council tax surcharge
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£5 million+ properties: £7,500 annual council tax surcharge
2. A 2% Rise in Property Income, Savings and Dividend Tax
The second notable change is a 2% increase in tax on property income, savings income and dividends. While not welcomed, it is arguably a softer outcome compared to the predicted reforms to National Insurance on rental income, which many had feared.
Implications for Landlords
Landlords have already faced considerable change in recent years, including increased compliance demands, higher borrowing costs, adjustment to property taxation and the introduction of the Renters Reform changes. This additional tax rise adds further pressure, particularly for those holding properties in personal names.For some landlords already considering an exit from the market, this could be the deciding factor. A reduction in rental stock could lead to increased competition for available homes, driving up rents for tenants.
What Happens Next in the UK Housing Market?
With the Budget uncertainty lifted, activity is likely to pick up again. Demand remains healthy, and with greater clarity around the new tax landscape, sellers may feel more confident stepping forward before the year ends.
Planning Your Next Move?
If you’re considering buying, selling or reviewing your rental portfolio following the UK Budget announcement, our team is available 8am to 8pm, seven days a week to offer advice tailored to your circumstances.
