With the Autumn Budget set to arrive on the 26th November 2025, the housing industry is alive with speculation about the possible impact on the market.
This will be Rachel Reeves’s second budget as Chancellor of the Exchequer, and one in which she will lean heavily toward addressing a reported £13.4 billion budget deficit as of September 2025.
In this article, we’ll look at the challenges facing the UK government, how the Chancellor might seek to address them, and what impact any changes could have on the housing sector.
The scale of the economic challenge facing the government was recently outlined by Chancellor Rachel Reeves, and her unusual decision to deliver a pre-budget speech on November 4th 2025.
The overriding tone of the speech was to warn of ‘hard choices’ to come, and significant changes to government messaging.
Indeed, after coming to power on the back of a manifesto pledge not to increase Income Tax, National Insurance (NI) or Value Added Tax (VAT), the Chancellor’s pre-budget speech made it clear that no taxes have been ruled out.
This contrast to the Labour Party’s previous manifesto pledge highlights the seriousness it is placing on getting the UK’s finances back on track, but also raises significant questions around how it will do this.
Paradoxically, by opening the door to possible future tax increases, the Chancellor has brought greater uncertainty to the upcoming budget and who the potential ‘winners’ and ‘losers’ could be.
Prior to the 4th November speech, there was heavy speculation that the Treasury might focus on more targeted revenue sources, such as inheritance tax and capital gains payments.
However, with seemingly all options on the table, commentators are scrambling to predict whether the government will target sweeping tax increases, specific property tax changes, or a combination of the two.
Until last week, it seemed that the Chancellor might be limited in her options by the party’s manifesto promises.
However, now that the government has acknowledged that no tax options are off the table, the scope of possible changes is much wider.
In a 10th November interview with BBC Radio 5 Live (1), Chancellor Rachel Reeves was pressed about the likelihood that the Labour Party would break its manifesto pledges relating to tax increases.
Her reply indicated that in the current economic climate, returning the UK to productivity was the highest priority – even about sticking to the government’s manifesto commitments.
“It would be possible to stick with the manifesto commitments. But that would require deep cuts to capital spending,” she said.
“The reason why our productivity and our growth has been so poor these last few years is because governments have always taken the easy option to cut investment – in rail and road projects, in energy projects, in digital infrastructure,” the Chancellor continued.
“And as a result, we’ve never managed to get our productivity back to where it was before the financial crisis.”
Of course, the simplest way to generate additional income from taxes would be to increase Income Tax and/or National Insurance taxation.
However, such a brash decision may be too much of a political gamble even in the current political climate.
What is more likely is that the government will look to increase tax revenues without directly increasing either Income Tax or NI.
The Resolution Foundation, a think tank with links to some members of government, has previously suggested that a 2p switch from NI to Income Tax could raise £6 billion. (2)
The benefit of this course of action is that it would not register as an immediate impact on workers’ pay packets.
A further option would be to extend the current freeze on Income Tax and NI thresholds that is due to end in 2028.
The theory here is that as salaries rise over time, more people will meet the threshold at which they start paying tax and NI, or qualify for higher tax rates.
Whatever decision the Chancellor finally takes, she has indicated that she may focus on higher earners and wealthy households, suggesting that “those with the broadest shoulders should pay their fair share.”
Although no official announcement has yet been made, several mainstream media sources revealed that the Treasury were actively modelling how extending NI to cover rental income for landlords could impact the property market. (3)
According to HM Revenue & Customs (HMRC), the total net income generated by landlords for the tax year 2023 to 2024 was £26.45 billion.
It has been suggested that extending NI to include landlord earnings could generate around £2 billion in additional tax revenue.
However, there has been some scepticism that such a move would generate as much revenue as predicted if landlords decide to exit the market.
According to The Negotiator, a poll by the buy-to-let lender Landbay found that a quarter of landlords intend to reduce their portfolio if they are required to pay NI.
Even starker is the warning that as many as 45% of landlords could sell all their properties if NI is extended to cover their earnings.
If the Treasury hopes to shield the government’s manifesto pledges from the impact of the Autumn Budget, Chancellor Rachel Reeves could lean towards property taxes to generate additional income.
According to Dr Tim Leunig and the centre-right think tank, Onward (5), one solution would be to replace Stamp Duty and Council Tax with two annual and ongoing, complementary property taxes.
These taxes would relate directly to the value of the property, with receipts from the replacement of stamp duty going to the national government, while proceeds from the replacement of council tax would go to the local authority.
Dr Leunig proposes a tax that would replace the Stamp Duty that people pay when buying a primary residence.
The proposal is to eliminate Stamp Duty and instead levy a new charge on the purchase of properties valued at £500,000 and only on the proportion valued over £500,000.
It is argued that implementing such a levy would make the market for properties valued between £250,000 and £500,000 much more liquid.
Additionally, it is claimed that those buying a home valued at just over £500,000 will pay a relatively small amount of tax compared to what they pay now.
The replacement of the Council Tax outlined by Dr Leunig is claimed to be relatively simple. It is suggested that, instead of Council Tax, property owners should pay a tax directly linked to the value of their home.
Additionally, it is intended that the tax would apply to the owners of all properties, including buy-to-lets, social housing, student houses, vacant properties, and AirBnBs.
The rate of tax will be set by local councils, who will also collect the revenues from payments.
The proposal sets a minimum annual charge of £800 for the tax and a maximum valuation cap on properties.
Although commentators like Dr Leunig have called for the abolishment of Stamp Duty, with some even referring to it as a ‘sin tax’, the government hasn’t given any indication of what, if any, changes to Stamp Duty will appear in the Autumn Budget.
The threshold at which first-time buyers pay stamp duty was lowered during the April budget, and it’s possible that the Treasury could decide to again focus on Stamp Duty as a source of additional tax revenue.
Given the unpopularity of Stamp Duty and the changes to SDLT in the previous Budget, it’s reasonable to assume that further increases to the cost of buying a home would be unpalatable to the Chancellor.
However, with ‘nothing being off the table’, there are few assurances around what might be ‘safe’ in the upcoming budget.
Although the Chancellor previously made changes to CGT tax during the last Budget by increasing the lower rate from 10% to 18%, and the higher rate from 20% to 24%, it’s possible that these rates could rise again.
However, given the flight of sellers to complete their transactions to ‘beat the tax deadline’, the impact on the market of further shifting these thresholds could be politically unpopular.
Perhaps more likely is the suggestion that the Chancellor could choose to apply specific rates to individual asset classes, such as second properties.
Inheritance Tax (IHT) became a hot topic for the government with the introduction of new measures affecting farms, businesses and pensions that are set to take effect during April 2026/2027.
However, with the backlash caused by the Chancellor’s proposal to impose a 20% inheritance tax on farmers with assets over £1 million and the ongoing need to address the UK’s budget shortfall, it’s reasonable to assume that IHT will be further scrutinised during the Autumn budget.
One aspect that could be targeted is the rules around lifetime giving.
Currently, a gift or asset is a potentially exempt transfer, which is not subject to inheritance tax if the person giving the gift survives for seven years.
It has been suggested that one way to increase potential tax revenue would be to extend this period to ten years.
There is currently a taper period following the third year of gifting, according to the current system, so any increase to the rules around inheritance tax will also need to include an evaluation of this taper period.
With so much speculation about what will ultimately appear in the Autumn Budget, it is difficult to know for sure what decisions the Chancellor will take.
In her interview with BBC Radio 5 Live, Rachel Reeves stated that no decisions have yet been finalised, so it is likely that speculation will continue to hold court over the coming weeks.
However, given the seriousness of the shortfall in the UK’s finances and the warning given by the Chancellor in her November 4th speech, it’s clear that a seismic change is approaching.
Homeowners will be thinking about the potential impact on their daily finances, as well as how future tax increases could impact an onward home move.
An increase in Income Tax or NI would mean that millions of people would need to re-evaluate their finances generally. This could have a marked impact on the affordability of moving home.
Likewise, buyers will be keeping an eye on any potential increases in Stamp Duty.
No indication of the likelihood of an increase in SDLT has been given, but a rise in rates could make it more expensive to purchase a new home.
Buyers will need to pay attention to whether the Chancellor decides to increase Stamp Duty and, more importantly, when any changes would come into effect.
If a future deadline is set for the introduction of new Stamp Duty rules, buyers may need to be ready to move quickly to complete their move ahead of time.
Conversely, scrapping Stamp Duty and replacing it with a levy to be paid only on larger properties (and potentially repaid over time, rather than upfront), could actually make it somewhat easier to buy a home.
However, such a change would represent a significant shift in policy, so it remains to be seen if the Chancellor has an appetite for such a bold move.
The rental space has already seen significant change in recent months, and with the first stages of reform stemming from the Renter’s Rights Bill set to take effect in May 2026, landlords will be eyeing the Autumn Budget with particular caution.
The application of NI payments to rental incomes would have a significant impact on the earnings of landlords, with some indicating that they would sell their rental properties if such a change were to come into effect.
Likewise, increases in council tax or income tax generally could also have an impact on the profitability of rental properties.
With so little uncertainty around what will be included within the autumn budget, landlords will at least appreciate a level of clarity after November 26th.
What is key, however, is that owners of rental properties should be ready to reassess the viability of their rental portfolios in the wake of the new Budget and turn to a trusted property expert should they decide to sell or reduce their rental portfolios.
With over 40 years of experience in helping people to buy and sell property, Edward Mellor Estate Agents has established a proven reputation as leading property experts.
We’ve grown with the property market and have been on hand to guide our customers through their property journey, whatever life might bring.
If you are considering selling a property in the near future, or want to get a true assessment of our property ahead of the Budget, contact Edward Mellor today for your free, non-obligation property valuation.
(1) – Reeves tells BBC ‘difficult’ Budget ahead as she again refuses to rule out tax rises – November 2025
(2) – The Resolution Foundation – “2p switch from National Insurance to Income Tax could raise £6 billion while protecting workers’ pay packets” – September 2025
(3) – The Guardian, “Treasury ‘considering taxing landlords’ rent’ to raise £2bn” – August 2025
(4) – Property rental income statistics: 2025 (Updated 29th August 2025)
(5) – Onward – How to Replace Stamp Duty and Council Tax – August 2024
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