As expected, Chancellor John Healey has delivered a low-key Autumn Budget, and there were only a few announcements for the housing sector.
One of the bigger ones was the confirmation of the previously trailed Your First Home scheme, with £4.7bn committed to helping first-time buyers purchase new-build properties.
There was also additional social housing funding, new powers for regional authorities and some modest measures to ease household costs.
The Chancellor left Stamp Duty and the main Capital Gains Tax rates unchanged, but raised taxes on rental income by a further two percentage points from April 2027.
To pay for some of his giveaways, he is introducing a temporary increase in the Bank Corporation Tax Surcharge from 3% to 6%, some of the cost of which could be passed onto mortgage borrowers.
Autumn Budget 2026: Property changes at a glance
| Measure | Budget announcement | Impact |
| Rental income tax | Rates rise to 24%, 44% and 49% from April 2027 | Lower after-tax returns for individual landlords |
| Capital Gains Tax | Rates on second homes and buy-to-let properties unchanged at 18% and 24% | No additional increase in selling costs |
| Stamp Duty | Rates and additional-property surcharge unchanged | Existing purchase costs remain |
| Mansion tax | £2m threshold retained; further implementation details confirmed | No wider extension to lower-value homes |
| Your First Home | £4.7bn scheme, 2.5% minimum deposit and 20% equity loan | Support for first-time buyers and new-build demand |
| First Time Buyer ISA | New scheme from April 2029 | Additional support for deposits |
| Bank tax | Surcharge rises from 3% to 6% temporarily | Costs could be passed on to customers, including mortgage borrowers |
| Social housing | Additional £1.5bn for around 10,000 homes | Some additional construction activity |
| Tourist tax | Powers for strategic authorities to introduce visitor levies | Potential cost implications for holiday lets |
| Regional regeneration | £285m funding and £1.5bn borrowing facility | Potential longer-term investment opportunities |
Another tax increase for landlords
For buy-to-let investors, the most significant announcement was a further two-percentage-point increase in the tax rates applied to property income.
In her November 2025 Budget, Rachel Reeves had already introduced new rates of 22%, 42% and 47%, which were due to take effect in April 2027. Healey has now raised those rates to 24%, 44% and 49% respectively.
It means landlords could face an increase of four percentage points in just six months’ time.
Heather Powell, partner at Blick Rothenberg, warns that the higher tax rates, combined with mortgage interest relief restricted to the basic rate, “will mean that landlords will be looking to sell up and invest their money elsewhere.”
She believes this could reduce rental supply and push rents higher as tenants compete for fewer properties.
In better news for landlords, Capital Gains Tax on residential investment properties was left unchanged at 18% and 24%.
And, despite earlier speculation that it could be lowered, the Chancellor left the threshold for the High Value Council Tax Surcharge (Mansion Tax) at £2m.
Your First Home: The final details
During his speech, the Chancellor confirmed the government’s £4.7bn Your First Home scheme, which is due to launch in April 2027.
It will provide first-time buyers purchasing new-build homes in England with a government equity loan of up to 20%, allowing deposits as low as 2.5%. Household income caps will be £110,000 outside London and £140,000 in London, with local property price limits.
The government estimates that the scheme will help 70,000 buyers and support the construction of 20,000 additional homes.
Zoopla recorded a 40% increase in searches for new homes when the scheme was first announced. Richard Donnell, executive director at the portal, warns though that its success will depend on setting the price caps at the right level and believes it could have around half the impact of the former Help to Buy scheme.
In another boost for those aspiring to get on the property ladder, the Chancellor also said he would launch a new First Time Buyer ISA from April 2029, which will offer a 25% government bonus on savings towards a qualifying home.
A missed opportunity for the wider market?
Although the property sector was relieved that there weren’t more tax rises, many were left disappointed by the lack of initiatives to boost what is currently a slow market. Rachel Geddes, strategic lender relationship director at Mortgage Advice Bureau, says:
“Today’s Budget was a missed opportunity for the wider housing market. Homeownership should be seen as one connected journey, and supporting one part of it in isolation won’t keep the whole market moving.”
She added that landlords and home movers had received little assistance, although the Budget’s conclusion could at least provide some certainty to buyers and sellers who had delayed decisions.
Rental supply and holiday lets
Nor did Healey offer any direct support for the private rented sector beyond the wider household cost-of-living measures.
The National Residential Landlords Association had called for tax reform to encourage investment in additional rental properties, alongside improvements to Local Housing Allowance and financial support for landlords facing energy-efficiency upgrades.
He did, though, confirm plans to give strategic authorities in England powers to introduce overnight visitor levies, potentially affecting hotels, holiday lets and other short-term accommodation.
The charges will be determined locally and could add to the cost of holiday accommodation, potentially affecting tourism demand.
Housebuilding and regeneration
Healey used the Budget to announce another £1.5bn for social and affordable housing, which is intended to facilitate the construction of around 10,000 new homes.
There were also measures to increase the regions’ control over their finances and investments, including £285m for Good Growth Funds and a £1.5bn borrowing facility for mayoral strategic authorities from April 2028.
The money can be used to support regeneration, infrastructure and development projects, potentially creating further opportunities for residential investment in cities and town centres.
In addition, a two-year real-terms freeze on qualifying retail, hospitality and leisure business rates could offer support to hard-pressed high streets, although its wider effect on surrounding property values is likely to be modest.
The Budget and the outlook for the housing market
One of the more revealing aspects of the Budget was the OBR’s assessment of the economy, which was published alongside it.
In its forecast, it downgraded its prediction for economic growth in 2027 from 1.6% to just 1%, and increased its inflation forecast from 2% to 3.4%.
It is also expecting household disposable income per person to fall by 0.8% this year and increase by just 0.1% in 2027.
This combination of weaker economic growth, higher mortgage costs and virtually stagnant household incomes is likely to hold back transactions and house-price growth. However, the outlook could rapidly improve if there is any kind of resolution to the conflict in the Gulf, which would ease pressure on energy prices and inflation.
Photo credit: BBC
