The Chancellor of the Exchequer, Rachel Reeves MP, has delivered the Autumn 2025 Budget, which sets out the Treasury’s plan of action for the year ahead.

The main announcements which will affect landlords and property investors are below:

• Increase of income tax rates on dividends, property and savings income by 2 percentage points from April 2027, which is predicted to raise £2.1bn
• A council tax surcharge ranging from £2,500 to £7,500 annually, on properties worth over £2m, raising £0.4bn
• National Insurance (NI) and income tax thresholds frozen for an extra three years beyond 2028, which will drag more people into higher bands over time, expected to raise £8.3bn
• Amount under-65s can put into cash Isas (Individual Savings Accounts) capped at £12,000 a year, with the rest of the £20,000 annual allowance reserved for investments

Industry Comment

Ben Beadle, Chief Executive of the NRLA, said: “Despite claims of tackling cost of living pressures, the Government is pursuing a policy that the Office Budget Responsibility has made clear will drive up rents.

“Almost one million new homes to rent are needed by 2031. But this Budget will clobber tenants with higher costs while doing nothing to improve access to the homes people need.”

Andrew Lloyd, Managing Director at Search Acumen, said: "For landlords, some will be hit twice in today's Budget if stung by a council tax surcharge and an increase in property income tax. Some will have no choice but to exit the market entirely, reducing supply of the already squeezed private rental sector. Rents have increased nationally by about 36% since 2020, a figure that sits well above wage growth and has tightened the screws on the cost-of-living crisis. What's more, the scarcity of rental homes will add further pressures to social care and social housing supply, with a housebuilding sector currently in turmoil…Taxing landlords to the extent that they are forced to increase rents or leave the market paints a concerning future for the UK's rental population."

Nick Leeming, Chairman of Jackson-Stops, said: "An economic lesson long learnt is that the more you tax an asset class, the less liquid the market for it becomes. Property is no different, yet the ability to buy or rent a home is essential as families grow, employment opportunities arise, and personal needs change. What we have seen today with mansion tax is that a decision has been made for politics, not economics.

"What concerns me is the greater economic consequences beyond the Chancellors tax grab, leaving £2m homeowners who are mortgaged having the potential to slip into negative equity as prices realign. We know house prices in London and the South East reflect decades of inflationary growth and chronic undersupply, where as a result, asset-rich and cash-poor homeowners will be disproportionately affected. A £2m threshold is arguably too low for these regions where a single blanket threshold fails to recognise regional nuances.

"A stable but functional property market is an essential requirement for the country’s prosperity. If we have a workforce that can move to new areas of opportunity, then we help to create the environment for economic growth. The kite flying of various taxation scenarios that we have seen over recent months has all but frozen the residential markets. We hope now that, despite the news of the mansion tax, we will have a period of certainty that has been so lacking under the current Chancellor.”

Marc von Grundherr, Director of Benham and Reeves, said: "These measures will fall overwhelmingly on London, where the majority of £2 million plus homes are located. The capital has already endured years of pressure at the top end and today’s announcement simply adds more cost to a market that is still trying to regain its footing. 

“If the government wants London to remain globally competitive, it must recognise that the prime market underpins activity and tax generation across the entire housing chain. Targeting it repeatedly will only weaken the foundation."

Paul Rickard, Chief Executive at Pocket Living, said: “As the OBR has pointed out in its budget response, the positive planning reforms will take time to materialise and a marked increase in housebuilding is only currently expected to take place from 2027/28. It is therefore imperative that all steps are taken to remove the current barriers to delivery, including tackling the issue of viability. This is especially important for the vital-to-delivery SME housebuilding sector which has the potential to deliver tens of thousands of extra homes across the country. While good progress has been made, now is the time to really pull every lever available to ease the housing burden and stop generation rent becoming generation debt.”

Sián Hemming-Metcalfe, Operations Director at Inventory Base, said: "Landlords may have avoided a National Insurance surcharge, but the two percent increase in property income tax will still land heavily with those operating within the rental sector. Smaller individual landlords are already working through one of the biggest operational shifts the sector has seen in years as the Renter’s Rights Act beds in. Many are investing in upgraded processes, property standards and compliance systems, and this extra tax cost arrives precisely when their outgoings are rising rather than falling.

“Although incorporated landlords may absorb the change more easily, the amateur and accidental landlords who rely on rental income as part of their household finances are far more exposed. They tend to act conservatively when the rules keep shifting, and they are often the first to reduce investment or withdraw from the sector entirely.

“In a rental market that is already struggling with a chronic lack of stock, anything that accelerates that trend will be felt by tenants long before it is felt by policymakers. Stability, not additional pressure, is what the sector needs now."

Gavin Whitney, Partner at London law firm Fladgate, said: “For commercial property, however, it was thankfully relatively uneventful.  

“The principal substantive change was an increase in income tax rates applicable to property receipts, alongside reductions to corporation tax writing-down allowances (which permit businesses to deduct capital expenditure, including property-related installations).  

“Even these seemingly modest measures are likely to weigh on the sector by depressing investor appetite—domestic and overseas—as returns are squeezed and competing jurisdictions become more attractive. The one bright spot for the sector was in retail, hospitality and leisure, where the Chancellor proposed reforms expected to lower rates bills for many smaller operators in those sectors while increasing them for higher-value premises such as large warehouses. That measure may help to bolster the high street, though it could prove too little, too late. The consequences of this Budget are likely to ripple across the wider real estate market, including construction and infrastructure.”