Chancellor of the Exchequer, Rachel Reeves, delivered the 2025 Autumn Budget on the 26th of November, to much discussion about what this would mean for businesses and individuals. But lost in the noise was the impact the budget could have on the property and construction industries.
Well, we’ve taken a look and outlined some of the main talking points, important for developers, lenders, buyers and sellers alike. It’s still too early for in-depth analysis, but early indications show it could have a range of positive and negative impacts, depending on individual circumstances.
Autumn Budget 2025: The Property Headlines
- No changes to Stamp Duty
- £2m+ ‘mansion tax’ introduced from April 2028
- No annual tax on homes over £500k
- 2% increase in Income Tax for landlords from April 2027
Stamp Duty to Remain Unchanged
The speculated changes to Stamp Duty Land Tax (SDLT) didn’t materialise, which should provide welcome certainty for buyers and sellers in the short- and medium-term. First-Time Buyers (FTBs) are still exempt from SDLT on properties up to £300k, and although the continuity will benefit those in lower-value housing, the stamp duty bands were set over a decade ago, and rising house prices may mean that the average buyer still pays more.
Developers may also benefit from the news, allowing them to plan for the future and invest in new projects, safe in the knowledge that any potential buyer won’t have to face a higher-than-expected tax obligation.
The ‘Mansion Tax’
Dubbed the ‘Mansion Tax’, the government has imposed the annual High Value Council Tax Surcharge (HVCTS) on all homes valued over £2m. Although this still only affects a very small percentage of overall UK properties, London and the South East will be particularly affected, as it’s where the majority of these homes are located.
Research from Rightmove suggests that around 1% of all homes for sale would fall into this bracket, and only 0.5% of sales agreed homes in 2025 would have been affected. The surcharge is paid in addition to council tax and varies for the four identified bands:
- Homes valued between £2m and £2.5m would pay £2,500 annually
- Homes valued between £2.5m and £3.5m would pay £3,500 annually
- Homes valued between £3.5m and £5m would pay £5,000 annually
- Homes value over £5m would pay £7,500 annually
To decide which bracket a property would fall into, the UK Government’s Valuation Office plans to undertake a ‘targeted valuation exercise’ every five years.
No New General Annual Property Tax
There had been much speculation about the introduction of an annual tax on homes valued over £500k, in addition to Stamp Duty, but this hasn’t materialised.
It means sellers won’t have to adjust asking prices to account for a new charge, helping maintain affordability for buyers. Specifically, it also avoids a potential cliff edge where demand for properties just below the £500k limit would rise, while dropping for those just above it.
While it’s very much business as usual, steady continuity is often welcome for both buyers and sellers, allowing them to plan with a degree of certainty.
2% Income Tax Increase for Landlords
From April 2027, there will be a 2% increase in Income Tax across all brackets:
- Basic Rate: 22%
- Higher Rate: 42%
- Additional Rate: 47%
Given that Stamp Duty on second homes increased to 5% in the 2024 Autumn Budget, the Renters’ Rights Act was introduced in November 2025, and new EPC Requirements come into force in 2030, we may see turbulence in the rental market.
Some landlords may simply sell up due to higher costs and lower incomes. However, average rents have increased by over 25% in the last five years, so overall profits may still be healthy, especially in high-demand areas in London and the South East.
Property Development in The South East
Regardless of changes in the Autumn Budget, the South East remains an incredibly strong and resilient location for property development. Ever-increasing demand, coupled with high incomes and proximity to London, make it a desirable place for people of all demographics to live.
If you’ve identified the perfect site for property development and need to secure funding, don’t hesitate to contact us. We’ve worked with developers of all sizes across the South East to finance and deliver a range of exciting and profitable projects, and we’re always eager to work with new people.
We offer a range of property development finance options, and can provide an Agreement in Principle within a week in most cases.
