5 Autumn Budget impacts on property

All eyes were on Downing Street on 26th November 2025, when Rachel Reeves held the famous red briefcase aloft, this year’s Autumn Budget notes contained within. The following address to the House of Commons was hotly anticipated – the expectancy blamed for a pause in the buying and selling market.

Once the jeers and cheers faded, and details digested, it was clear the property market wasn’t the scapegoat it could have been. Additionally, nothing changes overnight as many of the announcements will take effect in 2027 or later. Here are 5 Budget announcements buyers, sellers and investors should note:

1. A mansion tax is on its way: a new, annual surcharge will be applied to homes in England worth more than £2 million; a move designed to appeal to the homeowning masses who feel the wealthiest should pay more. Dubbed the mansion tax – although in some parts of London £2 million will buy you a small two-bedroom flat – this new introduction will affect in the region of 100,000 homes and see an average of £400 million generated by 2031. 

The surcharge, to be introduced from 2028, will see homes worth more than £2 million placed into bands, informed by a re-evaluation of council tax bands F, G and H. The additional annual tax will range from £2,500 to £7,5000, value dependent, and will be collected at the same time as council tax. 

2. Property income tax rates to rise: landlords will have expected a direct hit in the Budget and it came in the form of an increase to property income tax rates – the tax applied to rental income. Basic, higher and additional rates will rise to 22%, 42% and 47%, respectively. This will be effective from April 2027.

3. ISA rules are changing: if you are younger than 65 use an ISA (an individual savings account where you don’t pay tax on the interest earned) to save for a property deposit, there will be new rules to abide by. 

Total tax-free ISA savings will remain capped at £20,000 annually but how savings are split will change. From April 2027, the amount of money that can be saved, tax free, in a cash ISA every year will reduce from £20,000 to £12,000. The remaining £8,000 must then be saved in a stocks and shares ISA. If savers invest the full £20,000 in stocks and shares ISA, they will retain the tax-free allowance on the total amount. LISAs - aimed at first-time buyers - remain as is but a review will be conducted in 2026.

4. Fuel bills will decrease: the Government will scrap the ECO energy scheme – an initiative that forced large energy suppliers to fund home eco improvements for low income and vulnerable households. Although the scheme was a good idea in principle, energy companies passed the cost on to all bill payers, negating any savings. Scrapping the scheme should see £150 cut from the average household energy bill from April 2026.

5. Income tax thresholds are frozen: although not a direct property announcement, the Chancellor’s freeze of income tax thresholds in England and Wales will affect take-home pay and, indirectly, what people can afford to spend on mortgage repayments. 

The current freeze will now be extended for three more years, until April 2031. This is known as a stealth tax (or fiscal drag). More people will move up into high tax brackets by virtue of income, whether that is via rising wages, interest earned or additional income from investments, such as property. To note, Scotland sets its own income tax thresholds.

Although the Budget is a big fiscal announcement, there are multiple factors that impact affordability and accessibility to homeownership. We’d be delighted to discuss your unique circumstances and moving prospects. Contact us today for advice.