Autumn Budget 2025: what this means for buyers, sellers landlords and tenants

The 2025 Autumn Budget, announced by Chancellor Rachel Reeves, sets out several major changes that will affect the housing market. These changes will impact buyers, sellers, landlords, and tenants, so here’s a clear look at the key numbers and what they might mean for you.

Key Budget numbers that affect property

• The government expects to raise £26.1 billion more in tax each year by 2029/30.

• From April 2028, a new annual tax will apply to homes worth over £2 million, raising around £400 million a year. There will be four price bands, with the surcharge increasing from £2,500 for properties valued between £2 million and £2.5 million up to £7,500 for properties worth £5 million or more. 

• From April 2027, landlords will pay 2% more tax on rental income:

  • 22% for basic-rate taxpayers

  • 42% for higher-rate taxpayers

  • 47% for additional-rate taxpayers

• This extra rental income tax is expected to raise £500 million a year by 2028/29.

• Some levies placed on energy bills will go, lowering bills for millions of households by £150 a year, the chancellor said.

What this means for homebuyers

• The “mansion tax” only applies to properties worth over £2 million, so most first-time buyers and typical homebuyers will not be affected.

• Some high-value homeowners may choose to sell before 2028 to avoid the tax, potentially increasing supply at the top end of the market.

• However, as the Budget focuses on raising revenue, there’s no promise that mortgage rates or living costs will go down, so buyers should continue to budget carefully.

How sellers may be affected

• Sellers of homes worth over £2 million may see increased interest from buyers wanting to complete before the mansion tax begins.

• Those selling mid-priced homes could experience steady demand if high-end buyers shift their attention to more affordable properties.

• Overall, the market could see more luxury homes for sale and stronger interest in mid-range homes.

Implications for landlords

• From April 2027, the 2% rise in rental income tax will increase costs for landlords.

• Landlords with high-value homes may also face the new mansion tax from 2028, which could prompt some to sell.

• These rising costs may reduce profits, leading some landlords to potentially increase rents or reconsider their investment plans.

What tenants need to know

• Rents could rise if landlords pass on the increased tax costs, especially after 2027.

• If high-value homeowners choose to sell instead of paying the mansion tax, it could slightly increase the number of available high-end properties.

• There are no new protections or rent controls for tenants in the Budget, so any impact will depend on how landlords respond.

Impact on the wider housing market

• With £26.1 billion expected to be raised annually by 2029/30, this Budget represents a significant shift for the economy and the housing sector.

• The measures mainly affect expensive homes and the Buy-to-Let sector, potentially reducing the number of landlords and high-value investors.

• For first-time buyers and people looking for more modest homes, reduced competition could make it slightly easier to get onto the property ladder.

The Autumn Budget 2025 introduces meaningful changes that will shape decisions for buyers, sellers, landlords and tenants.

At Reeds Rains, we’re closely monitoring how these policies will affect local markets across the UK. If you’re planning to buy, sell, let or rent, our expert local teams are here to help you understand your options and make confident decisions.