Autumn Budget 2025: What It Could Mean for the UK Property Market

The upcoming Autumn Budget is set to be one of the most consequential in recent years. With affordability stretched, mortgage rates stabilising but still elevated, and speculation about tax reform freezing activity across the market, buyers and sellers are waiting for clarity before making decisions. The property sector is anticipating a budget that could reshape how homes are taxed, bought, and sold for the decade ahead.

At Festa & Co, we break down the four major areas likely to feature in the Budget, the broader challenge the Government faces, and what the latest data reveals about market conditions.

1. Potential Budget Measures: Four Key Themes

1. National Property Tax & Stamp Duty Reform

One of the most widely discussed proposals is the introduction of a national property tax or mansion-style annual levy on higher-value homes. This could apply to properties above £500,000–£2 million, and may either sit alongside Stamp Duty or eventually replace it for owner-occupiers.

The intention behind this reform is not only fiscal, but generational. Older and wealthier homeowners — who collectively hold the majority of property wealth in the UK — would bear a larger share of tax, relieving younger buyers of some of the upfront costs associated with moving.

This shift aims to:

• Reduce upfront Stamp Duty costs for first-time buyers and families upsizing

• Encourage movement through the housing chain

• Create a fairer balance between taxing mobility and taxing wealth

By reducing barriers at the bottom of the ladder, the Government hopes to stimulate activity where the market is most constrained.

2. A Tougher Tax Environment for Landlords

Landlords are expected to face stricter measures aimed at aligning rental income with other types of earnings. This could include:

• National Insurance on rental profits

• Higher Stamp Duty surcharges on second homes and buy-to-lets

• Adjustments to Capital Gains Tax

While this may place financial pressure on smaller landlords, it could also help release more stock into the owner-occupier market at a time when supply remains tight.

3. First-Time Buyer Support and Bottom-Up Stimulus

Rather than introducing expensive grant schemes, the Government is likely to focus on improving affordability through structural tax reform. This may involve:

• Adjusting Stamp Duty thresholds

• Shifting SDLT liability from buyer to seller

• Allowing buyers to pay Stamp Duty over time

• Enhancing first-time buyer relief

These changes aim to unlock movement at the bottom of the housing ladder, creating a ripple effect across the wider market.

4. Council Tax Reform

Council tax is still based on 1991 valuations. The Budget may start the process of modernising the system, including:

• Updated valuation bands

• A transition to a more value-based approach

• Integration with long-term property taxation reforms

Although these changes will be phased, they represent a significant shift in the long-term cost of homeownership.

2. The Government’s Challenge

The Government faces a difficult balancing act: improving affordability, maintaining fiscal credibility, and avoiding sudden shocks to the housing market. Each proposed reform risks creating behavioural changes.

For example:

• Talk of Stamp Duty reform has already caused many buyers to pause transactions.

• Rumours of a new property tax have discouraged high-value homeowners from listing.

• Landlord tax tightening could reduce rental supply if not handled carefully.

Because of this, we may see bold proposals accompanied by phased implementation timelines and extended consultation periods to avoid destabilising the market.

3. UK Property Market Overview (Autumn 2025)

Rightmove’s latest report provides a clear insight into how uncertainty is affecting behaviour:

Pricing Trends

• Average new seller asking price: £364,833

• Down 1.8% month-on-month and 0.5% year-on-year

• November’s 1.8% drop is the largest fall at this time of year since 2012
  (Source: Rightmove House Price Index, Nov 2025)

This reflects sellers becoming more realistic in order to secure committed buyers.

Sales Activity

The upper end of the market is being hit hardest by speculation around tax reform:

• Sales agreed for homes above £2 million are down 13% year-on-year

• Sales in the £500,000–£2 million range are down 8% year-on-year
  (Source: Rightmove, November 2025)

These price points are most vulnerable to changes in Stamp Duty or any new property tax.

Price Reductions

• 34% of all homes listed have seen at least one price reduction — the highest level since February 2024
  (Source: The Guardian, summarising Rightmove data)

This shows clear evidence of sellers adjusting expectations in a slower, more cautious market.

Sentiment

The overall environment is defined by hesitation. Buyers do not want to transact weeks before a reform that could reduce their tax bill. Sellers also want clarity before pricing decisions. Despite strong underlying demand, uncertainty has created a natural pause in activity that could reverse quickly once policy becomes clear.

4. What the Budget Is Trying to Achieve

Although the final details are not yet confirmed, the direction of travel is consistent. The Budget aims to:

• Shift the tax burden from transactions to wealth

• Lower upfront costs for first-time buyers and growing families

• Improve affordability without major fiscal spending

• Encourage more movement across the housing ladder

• Create a more stable, predictable tax environment

A healthier housing market depends on mobility. The Government’s objective is to unblock that mobility at the bottom while asking wealthier households to contribute more over time.

5. Festa & Co Final Thoughts

This Budget could reshape the landscape of UK property taxation and the behaviour of buyers, sellers, and landlords for years to come. Whether you’re considering buying, selling, investing or securing planning opportunities, these reforms will play a critical role in shaping decisions throughout 2026 and beyond.

At Festa & Co, we are closely monitoring updates and will release detailed guidance on Budget Day, including a breakdown of what each measure means in practical terms for homeowners, investors and landowners.

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