"If a buy-to-let investor wasn’t already reviewing their portfolio, they certainly will be now. The 2% increase on income tax from properties adds yet another straw to the back of an already weakened camel"
- Will Stevens - Killik & Co
In terms of 'property', once again it was a little thin on the ground - some will see this as another missed opportunity perhaps, others that they got off lightly.
As you would imagine, the industry was quick to react. Here's what they're saying.
Ben Beadle, Chief Executive of the National Residential Landlords Association, said, “Despite claims of tackling cost of living pressures, the Government is pursuing a policy that the Office for Budget Responsibility has made clear will drive up rents."
“Almost one million new homes to rent are needed by 2031. But this Budget will clobber tenants with higher costs while doing nothing to improve access to the homes people need.”
Dominic Agace, chief executive of leading estate agents Winkworth, said, “Hitting landlords with National Insurance will further shrink the availability of rental property, particularly in London, where the buy-to-let model for many landlords relies on mortgage funding and so there is no headroom for this extra cost in the investment. If we have fewer rental properties, there will be a poorer quality of life for people forced to live at home for longer, or live in a flat with more sharers.”
Will Stevens, Partner at Killik & Co, comments, “If a buy-to-let investor wasn’t already reviewing their portfolio, they certainly will be now. The 2% increase on income tax from properties adds yet another straw to the back of an already weakened camel."
"A long running theme of hammering property owners with stealth taxes, higher administrative burdens, capital gains taxes and a lack of long-overdue Stamp Duty reform leaves the market very weak. Property as an asset class is a shadow of its former self, and we expect many investors to look elsewhere for easier, more stable and fulsome returns.”
Ben Thompson, Deputy CEO, Mortgage Advice Bureau, said, “As expected, with lots on the Chancellor's plate, this was a fairly quiet budget for the majority of the housing sector. While the silence around the sector is undeniably disappointing for the millions trying to get onto or move up the property ladder, we need to remain optimistic.
“Thanks to earlier changes made this year by regulators and lenders, many more people could now move home than this time last year. In fact, we have a very high number of mortgage products available, so there’s still plenty to be positive about.
“There is, of course, more the Chancellor could’ve announced today, for example, some much-needed changes to Stamp Duty or a revival of a housing tax relief such as Mortgage Interest Relief At Source (MIRAS). However, what we do have now is certainty, improved affordability, falling mortgage rates, and a record number of mortgage products for people to choose from.
“What we need to see now for the housing market to really get going is stronger consumer confidence. We also ideally need anyone thinking of buying their first home (and, in fact, those planning a move up the ladder) to be fully updated about what mortgage options they do have today versus this time last year.
"The fact remains: it’s a very good time to buy. If you believe homeownership is out of reach, think again. A mortgage adviser can cut through the complexity, unlocking options you didn't know existed, and securing the right deal for your circumstances."
Dr Neil Cobbold, Commercial Director at Reapit, says: “Today’s Budget will affect sales and lettings differently across the UK, but it will finally bring clarity after months of speculation that have hampered transactions. The 'mansion tax' on properties worth £2m or more will create a cliff-edge on valuations and potentially pause some high-end sales, particularly in London suburbs and the South East.
“The 2% increase in property income tax will dent landlord income and risk rental property attrition at a time when we need more supply. However, it also creates an opportunity for expert agents to advise on alternative strategies, such as higher-yield tenancy types including student rentals and HMOs, refinancing options to reduce mortgage payments, or even transitioning properties to sales.
Richard Donnell, Executive Director at Zoopla, comments, “Today’s Budget delivers welcome relief for the 210,000 homeowners selling properties over £500,000, removing the threat of a new annual property tax that had stalled market activity. We expect this to renew buyer interest as we head into 2026, particularly across London and southern England, where a large share of homes for sale sit above this threshold.
“This is the moment for agents and housebuilders to get ahead of their competition by tailoring their marketing messaging to unlock latent demand before the Boxing Day bounce and boost in traffic Zoopla traditionally sees in the new year.”
Adam Jennings, head of lettings at Chestertons, says, “Increasing income tax for landlords could have dire consequences on the rental market. More landlords could decide to sell up which will result in fewer available rental properties and leave more renters struggling to find a property within their budget.”
Steve Cox, Chief Commercial Officer at buy-to-let lender, Fleet Mortgages, said, “Instead of the widely anticipated announcement of National Insurance being levied on landlords’ rental income, the Chancellor has instead decided to increase basic, higher and additional property income tax rates from April 2027. This means landlords will now pay 22%, 42% and 47% from that date, and this is anticipated to raise £0.5bn every year from 2028-29 onwards."
"It means landlords will once again see their incomes squeezed, at a time when costs continue to rise, and the introduction of the Renters’ Rights Act was already adding further costs to landlords next year, all of which are likely to be passed on to tenants in the form of higher rents.
“Add in this income tax increase to all the extra costs and responsibilities, and again landlords are going to see their margins on properties under further pressure. It is far too early to say how this will impact supply within the PRS, but of course it will require a reassessment by landlords and we are likely to see rents being reviewed in order to maintain profits."
"I think we can be fairly certain that this decision will move landlords even further towards using corporate vehicles for their portfolios; our most recent Rental Barometer already showed 81% of all mortgage applications we received were from limited company borrowers, and the direction of travel now looks likely to move even further towards this.”
Colleen Babcock, Rightmove’s property expert says, “The property market needs less taxation not more, to encourage and enable movement. Today’s announcement of a Mansion Tax could lead to some distortion at the top end of the market, particularly as the implementation date draws closer. It may also have an impact across the rest of the market."
“Even if some wealthier buyers are unfazed by an additional cost, we could see some fall-throughs as others in this price bracket reconsider the long-term implication of their purchase. Sellers of homes priced very close to the £2 million mark may need to ask for £1.99 million to avoid putting off potential buyers. And retired homeowners who benefitted from house price inflation may face the difficult decision of whether they can afford the annual upkeep of a £2 million home."
“Importantly, while this likely very complex tax aims to target the £2 million and £5 million price sectors, there is an inevitable trickle-down effect for the rest of the market. Even though our data shows that less than 0.5% of sales would be directly affected, a slower market can affect all types of movers, from first-time buyers to key workers and families."
“While there will always be a market for the highest priced, premium properties in the most popular locations, this tax would disproportionately affect London and the south of England markets, which are still recovering from April’s stamp duty increase. It's a tax which is more stifling than supportive of movement and growth within the housing market.”
On property income tax increasing by 2%, she added, “Landlords might look like an easy target, but rental market taxation is usually detrimental to tenants looking to rent a home. The simple fact is that in order to provide tenants with much needed homes landlord investors need to be able to make the sums add up."
"Changes to mortgage interest relief, higher buy-to-let mortgage rates, the cost of compliance changes, and stamp duty increases have only made that harder. While UK Finance data suggests that despite challenges, more landlords are investing in new purchases and remortgaging than last year, today’s news will make it even harder for some landlords to make investments viable."
Melanie Leech, Chief Executive, British Property Federation, said, “There wasn’t a single thing said in the Chancellor’s speech that wasn’t leaked in its chaotic build up. However, the lack of surprises doesn’t hide the disappointment that many in the development industry will feel after today. Whilst she spoke positively about the importance of business investment and maintained full expensing and the headline rate of Corporation Tax, there was little to cheer from an investor perspective."
"Indeed, confirmation of the large property business rates surcharge will impact critical national infrastructure like logistics businesses and priority sectors identified in the Government’s own Industrial Strategy. While it was always going to be a challenge for the Chancellor to both balance the books and support economic growth, it is disappointing that there was nothing introduced to alleviate acute development viability issues. Overall, no surprises, but nothing to cheer either.”
Adam Bovingdon, Managing Director - Property Development at United Trust Bank (UTB), comments, "After a long wait and an early glimpse from the OBR, the 2026 Autumn Budget Statement is now behind us. Whilst it brought no major incentives for housebuilding, clarity is better than the uncertainty that has loomed over recent months. The so-called ‘mansion tax’ has grabbed headlines and would have created far less news without this emotive nickname. If it were called what it is, an increase in council tax for high-value homes representing less than 1% of households in the UK, most people would have dismissed it as largely irrelevant to the general public.
“Hopes for a revised SME Help to Buy scheme and a stamp duty break for first-time buyers have faded, yet some form of stimulus would help to encourage the market and could be justified as an investment for growth.
“Data from the Home Builders Federation (HBF) shows the previous Help to Buy scheme delivered strong returns. Many repaid loans generated about 9% uplift, early redemptions brought millions in interest, and the scheme is projected to return more than £2bn to the Exchequer. For a government focused on growth and committed to housebuilding, reintroducing a targeted Help to Buy initiative would be a welcome and logical step.”
Dave Harris, CEO at more2life, said, “Older homeowners will be feeling the pinch from this Budget, irrespective of the benefits of the Triple Lock on their State Pension.
“Extending the freeze on tax thresholds will drag greater numbers into paying more tax to the Treasury, with more pensioners paying Income Tax on their pension payments, while there is a bigger chance now that homeowners will see expected house price growth pushing their estates into the area of Inheritance Tax payments.
“Couple that with the introduction of the new Council Tax surcharge on high-value properties, and it’s inevitable there will be real concern amongst older homeowners about how best to handle their increased outgoings on tax.
“Being able to tap into their most valuable asset - their home - is only going to become more important due to these rising costs, and we need to ensure they are signposted effectively to advisers so they can get the professional support they need.
“The good news here is the later life lending market has evolved significantly, with a wider choice of flexible product options available which can be tailored to match the older homeowner’s circumstances.
“This Budget, and the specific impact it will have on older borrowers, should serve as a prompt for advisers to communicate with their client base, and ensure they are presented with the full range of potential solutions, rather than a narrow selection of mainstream options.”
Scott Cabot, Head of Residential Research at CBRE says, “On the face of it, the proposed Mansion Tax would apply to about 100k properties (so 0.4% of England’s total stock). We have examined the sales of all properties over £2m+ since 2020 and have unsurprisingly found that this would disproportionately affect homeowners in London and the South East.
"Unfortunately, increasing the tax rate for property income is another blow for private landlords, and risks exacerbating the acute supply shortage of rental homes across the country.”
Phil Hooper, CEO of Close Brothers Property Finance, said, “It’s extremely disappointing that the Government has missed an opportunity to support the housebuilding industry through a new equity loan scheme.
“The Government is holding up the Mortgage Guarantee Scheme as its flagship policy to support first-time buyers, but the numbers tell a different story. Since launching four years ago, the Scheme has accounted for just 1% of all new mortgages.
“The downturn in the new homes sales market is the single biggest issue for SME housebuilders at the minute and it’s preventing them from being able to scale up their output. We’ve seen volume housebuilders take matters into their own hands by launching their own versions of equity loan schemes. Unfortunately, this isn’t an option for SMEs who don’t have that kind of financial firepower."
"SMEs have always been at a competitive disadvantage to the PLCs and the gap between them is only going to grow wider at this rate. Without targeted intervention, we risk losing the very businesses that are building the high-quality homes that the country desperately needs.”
