MARKET UPDATE
MARKET UPDATE
The UK Autumn Budget announcement 2025: “Spades in the ground and cranes in the sky”
November 27, 2025 • Author: Richard Bradstock
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What does the UK Autumn budget mean for property investors and landlords?
Having endured weeks of speculation in the run up to the UK Autumn Budget and tabloid and right-leaning publications publishing headlines that were tantamount to an air steward shouting “BRACE! BRACE! BRACE FOR IMPACT!” we might now dispense with the oxygen masks and realise, was the budget announcement really that bad?
The answer, no. Not at all!
No changes to Stamp Duty.
No reordering of Council Tax Bands.
No changes to Inheritance Tax.
Phew.
As the Brits are wont to say, keep calm, and carry on.
Instead, the Chancellor will be filling the £30billion hole in the public finances by raising the majority of the £26bn she set out in her budget today through a freeze on income tax thresholds which will bring in £8bn a year by 2029-30 by “quietly dragging more people into tax.” But the effect for you as an overseas property investor, or expat are minor so breathe easy and read on.
Like other Autumn budgets of recent years it wasn’t without its drama. Step forward, Rachel Reeves, palpably livid at being scooped by the Office for Budget Responsibility (OBR) who ‘accidentally’ leaked her entire announcement an hour or two before her delivery, sending the House of Commons into a feeding frenzy.
So, what does the UK Autumn budget mean for property investors and landlords?
Two things only:
Tax on property income and dividends will raise by 2% in April 2027 on all income levels, from basic to higher.
From 2028 a High Value Council Tax Surcharge will be levied on properties above £2million at £2.5k and £7.5k for properties worth more than £5million.
How will the new measures in the Autumn Budget effect the UK property market?
Well, as ever, when the government tries to manhandle the property market the consequences are rarely, as ever, they predict. The money always finds a way where landlords and property investors benefit, much like the now-scrapped Help To Buy Scheme, which continues to remain a carrot for next year’s budget, perhaps.
There’s little doubt that the 2% increase in tax on income from property won’t further squeeze landlord’s margins, and whilst this may produce the unintended effect of deterring would-be investors and benefiting existing landlords it also highlights the potential importance of investing in a company structure rather than a personal name.
With fewer landlords entering the sector (at least initially) the supply of quality rental stock will continue to reduce; and so we’re likely to see rents rising steeply again. The OBR, eclipsed Reeves by saying the policy ‘risk[s] a steady long-term rise in rents if demand outstrips supply.’
And demand is continuing to outstrip supply and will do so for the long-term future. The UK has the second worst rate of homes per 1,000 people in Europe. England has 5.85m missing homes and London is down 1.1million. Reeves talked of putting ‘Spades in the ground and cranes in the sky’ but at her current rate of building, 300k homes a year, it will take 50 years to fill the gap. The government says they have overhauled the planning system to get Britain building, but we’re yet to see a serious uptick in activity in the new homes market. All this could change however, with an unintended effect of the new Council Tax Surcharge on homes above £2million.
A surcharge on properties £2million+ will most definitely kickstart the market under that threshold and will likely be felt most in the South East and London which has seen the most sluggish returns over the last two years in comparison with the strong growth of regional cities like Birmingham and Manchester. We may see people downsizing, stoking competition in the lower ends of the market, sending property prices upward – good news for property investors who have bought already and who are on the cusp of buying. Again, those who bought already this year will have the most to gain. And those who were thinking of buying can now proceed, knowing that there are no ugly surprises to Stamp Duty.
UK growth better than expected: positive economic sentiments for investors
Another budget boon for property investors was the upgrading of the UK’s economic growth from 1% to 1.5% by the OBR. Government borrowing will fall as a share of GDP and the budget measures doubled the headroom against the stability rule showing a resilient UK economy that is strong and stable. This is not to be sniffed at and should be heeded by investors tempted to chase shorter term gains in riskier economies. Our key takeaways from today’s budget, underline our existing and long held confidence that the UK continues to be one of the strongest and most compelling property markets in the world, offering investors strong guaranteed returns over the long-term.
We expect a side effect of this budget will be to spur the UK housing market on as the bombshells some were expecting for the property market did not materialise and investors can take action now knowing what awaits them.
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About the author
RPA’s founder, Richard has worked in residential development investment for 20 years and oversees the general running of the business ensuring the RPA Group retains true to its founding principles. Over his career Richard has built an incredible network of international property investors and like-minded industry professionals.
Founder & Managing Director
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