With Wednesday’s Autumn Budget approaching, senior figures from the property industry have been sharing their views on what it could mean for the housing market.
Their concerns range from taxation to market activity, property values, development viability and the future supply of rental homes.
Market confidence and property activity
The impact of the Budget on confidence in the housing market is one of the biggest issues, and comes at a time when higher borrowing costs and economic uncertainty have already made buyers and sellers cautious.
Adam Day, head of estate agency at eXp UK & Europe, says: “The most important thing the Chancellor can deliver for the property market on Wednesday is confidence. Buyers and sellers need a stable economic environment in which they can make decisions, and further uncertainty around taxation and household finances will do little to encourage them to act.
“We don’t necessarily need another headline-grabbing housing initiative. What we need is a coherent approach that supports affordability, encourages transactions and gives the industry the certainty to plan ahead. If the Budget can deliver that, it will be far more valuable than a collection of short-term incentives.”
First-time buyers and property values
One measure already promised for Wednesday’s Budget is the Government’s new Your First Home scheme.
Under the proposals, eligible first-time buyers will be able to purchase new-build homes with deposits as low as 2.5%, supported by a 20% government-backed equity loan.
The scheme is intended to improve access to homeownership and stimulate demand for new-build properties. However, concerns have been raised about its possible impact on property prices.
Verona Frankish, CEO of estate agency Yopa, says: “There’s no question that first-time buyers need help getting onto the property ladder, but the Chancellor needs to be extremely careful that Wednesday’s Budget doesn’t simply repeat the mistakes of the past.
“Years of initiatives designed to stimulate demand have helped push house prices further beyond the reach of aspiring homeowners. A smaller deposit requirement may provide a welcome short-term boost, but unless we’re building enough suitable and affordable homes, we risk inflating prices further and leaving buyers financially stretched, with the added danger of negative equity should market conditions change.”
Will the Budget help housebuilders?
The success of the new first-time buyer scheme will depend partly on whether it encourages developers to build more homes.
Participating developers will be expected to contribute towards its costs at a time when they are facing rising construction expenses and planning delays.
Andy Morrison, director of housebuilder UK Property Development, believes the Government needs to consider both sides of the equation.
He says: “While the proposed first-time buyer scheme may help stimulate demand for new-build homes, the real test will be whether it improves the commercial viability of bringing additional housing stock to market.
“Developers are already balancing substantial upfront costs, planning delays, infrastructure requirements and rising construction expenses. If they are also expected to contribute towards the cost of government-backed buyer incentives, the Chancellor must ensure this doesn’t create another financial obstacle to delivery.
“Wednesday’s Budget needs to focus just as much on unlocking viable development land, improving the planning process and reducing the cost of bringing sites forward as it does on helping buyers purchase the finished product. Without that balance, stimulating demand alone will do little to address the underlying shortage of homes.”
Property taxation and asset values
Potential changes to property taxation are another big concern, particularly at the upper end of the housing market.
The Government has already announced plans for a High Value Council Tax Surcharge on properties worth £2 million or more from April 2028.
There has also been speculation about additional taxation affecting high-value homes and overseas owners, although no new measures have been confirmed.
Marc von Grundherr, director of London estate agency Benham and Reeves, says: “The temptation to target high-value property as a convenient source of additional tax revenue is understandable, but there’s a danger that the Chancellor underestimates the wider consequences of doing so.
“London’s prime property market already operates under a substantial tax burden, and further measures aimed at wealthier homeowners or international buyers risk weakening the capital’s appeal as a destination for investment. The Government should be encouraging confidence and activity across the market, not creating further reasons for buyers and sellers to hold off.”
Landlord taxation and rental supply
Landlords have a different set of financial pressures, with higher taxation of rental income already coming in April 2027.
Under changes announced in last year’s Budget, property income will be subject to separate tax rates of 22%, 42% and 47%, affecting individuals receiving income from letting property.
Against this background, further speculation about property taxation has raised questions about future investment in the private rented sector.
Sam Humphreys, head of M&A at lettings acquisitions specialist Dwelly, says: “The Chancellor needs to recognise that property investment is ultimately a commercial decision, and landlords will continue to assess whether the returns available justify the costs and risks associated with ownership.
“Further taxation could accelerate the consolidation of rental portfolios, with smaller and less efficient landlords increasingly likely to reassess their position or exit the market altogether. While this may create opportunities for professional operators to acquire and manage portfolios more efficiently, the Government must be careful not to discourage investment in rental housing as a whole.”
The cost of maintaining and managing rental accommodation is another concern, particularly as landlords adapt to the changes introduced by the Renters’ Rights Act and other regulatory requirements.
Roma Sharma, managing director of property management specialists Rushbrook, argues that the Government needs to take these expenses into account when considering further taxation.
She says: “The Government must be careful not to view landlords simply as an additional source of tax revenue. The practical reality of providing good-quality rental accommodation is that costs continue long after a property has been purchased, from maintenance and essential repairs to safety requirements, property improvements and professional management.
“These are not optional expenses, and landlords cannot continue to absorb rising costs indefinitely, particularly when they are already adapting to substantial changes in the regulatory environment.
“The Chancellor should be looking at ways to support responsible landlords in maintaining and improving their properties, rather than adding to the cumulative burden of ownership. If smaller landlords find themselves unable to sustain these obligations, it is ultimately tenants who risk losing out through reduced choice and greater pressure on the available rental stock.”
Mortgage lending and investment finance
The availability and cost of borrowing are also a concern, with the Chancellor facing pressure to raise revenue against a difficult economic backdrop.
Reports ahead of the Budget have focused on a potential rise in the corporation tax surcharge on bank profits. The concern is that banks could pass some of the additional cost on to customers through higher mortgage and other lending rates, or become more cautious about lending.
Jonathan Samuels, CEO of specialist lender Octane Capital, believes any such move needs to be considered in the context of the Government’s wider economic objectives.
He says: “The Chancellor faces a difficult balancing act between raising additional revenue and creating the conditions needed for economic growth. Banking and finance may appear an obvious target for further taxation, but policymakers must be mindful of the potential knock-on effects for lending and investment.
“The property sector relies heavily on access to finance, whether that’s developers bringing new homes to market, investors upgrading existing housing stock or buyers navigating increasingly complex transactions. Any measures that discourage lending or make capital more expensive could ultimately undermine the very growth the Government is trying to achieve, and the property sector desperately needs.”
