Every Autumn Budget is significant, but this week’s was particularly important. Coming exactly 100 days since Andy Burnham became Prime Minister, it was the first to be delivered by Chancellor John Healey, and it came at a critical time for the property sector.
The Budget followed a year of considerable change for the UK housing market, including the introduction of the Renters’ Rights Act in May, rising government bond yields and continued uncertainty over the direction of interest rates.
With further increases to income tax on rental profits already scheduled for April 2027, landlords in particular will have been watching closely for any additional measures that could affect their investment plans. Mortgage brokers, meanwhile, will have been hoping for policies that improved confidence and activity across the property market.
So, what did the Chancellor announce, and what could it mean for property investors and brokers?
Further increase to property income tax
Perhaps the most significant announcement for landlords was a further 2-percentage-point increase in property income tax rates from April 2027, on top of the increase announced in the previous Budget. This means that the basic, higher and additional rates will rise to 24%, 44% and 49% respectively.
No stamp duty or Capital Gains Tax overhaul
As expected, the Chancellor announced no major changes to stamp duty or Capital Gains Tax on property.
While landlords face higher taxes on rental income, the absence of further changes to main property transaction taxes provides some certainty to investors considering purchases or sales.
Devolution and housebuilding
The Government’s devolution plans aim to ensure that 90% of England’s population is covered by a devolution agreement by the end of 2028, giving local leaders greater influence over housing and planning decisions. Alongside a commitment of £1.5 billion for social and affordable housing, this could help increase housing supply in areas where demand for housing is particularly high.
The Chancellor also announced measures to help first-time buyers onto the property ladder, including the Your First Home Scheme, which aims to support 70,000 first-time buyers through government-backed equity loans, and a new First Time Buyer ISA.
Together, these measures, could influence housing supply and demand across the country. While increased housebuilding could help ease pressure on property prices and rents, support for first-time buyers could stimulate demand for homes, with the impact varying across regional property markets.
Supporting landlords in a changing market
The speculation in the build-up to each Autumn Budget can prove disruptive, with many property buyers and sellers adopting a ‘wait and see’ approach. Now that the Chancellor has delivered his statement, investors and brokers across the property market have at the very least got greater clarity on the Government’s plans for the economy and property market.
Despite the challenges facing the sector, the UK property market continues to offer opportunities for investors. For those looking to purchase property, refinance existing investments or review their portfolios, understanding the implications of the Budget will be an important part of planning their next steps.
At RAW Capital Partners, we remain committed to supporting property investors and mortgage brokers with a pragmatic approach to lending, fast decision-making and our range of specialist buy-to-let mortgages and bridging finance products.
Whatever the wider economic outlook, our focus remains on helping brokers and their clients access the financing they need to progress their property investment plans.
For brokers looking to discuss financing options for their clients, get in touch with our team to find out how we could help.