Autumn Budget 2025: What Does the Budget Mean for the London Housing Market?
The Chancellor, Rachel Reeves, has now unveiled the Autumn Budget, bringing with it a series of measures that will directly influence the residential property landscape. While several changes had been anticipated, the final announcement centres on a new levy for higher value homes, alongside a notable absence of any reform to stamp duty, a point of particular interest given the recent speculation. Landlords will also face an additional 2% income tax on rental returns, adding further pressure to an already strained sector.
Introduction of a Mansion Tax for Homes Above £2 Million
From April 2028, properties valued over £2 million will be subject to a new annual surcharge, payable by the homeowner rather than the occupier. The charge has been set at £2,500 for homes over £2 million and £7,500 for those exceeding £5 million and will sit alongside existing council tax obligations.
Although this segment represents a very small proportion of national housing stock, less than 0.5% of agreed sales this year fall above £2 million, activity within this price bracket has already softened. Sales agreed in the £2 million+ category have fallen by 13% year-on-year, indicating that the market has been responding to anticipated policy changes for several months.
When Will the Mansion Tax Be Introduced?
The new levy will apply from April 2028 to all qualifying properties.
How Will It Affect Homeowners?
Annual charges will be determined by the property’s valuation.
