Autumn Budget 2025: What It Means for the Prime Residential Property Market

As Chancellor Rachel Reeves prepares to deliver the Autumn Budget on 26 November 2025, the prime residential property market is bracing for significant changes. With a projected fiscal deficit of up to £50 billion, the government is under pressure to raise revenue without breaching its manifesto commitments not to increase income tax, VAT, or employee National Insurance. This has shifted attention toward property-related taxation, which could have far-reaching implications for high-value homes and investment properties.

Key Budget Themes Affecting Prime Property

1. Stamp Duty Reform

One of the most discussed proposals is replacing Stamp Duty Land Tax (SDLT) with a national property tax. This would be an annual levy on homes valued over £500,000, potentially starting at 0.54% and rising with property value. While this could ease upfront costs for buyers, it may affect long-term ownership costs and influence pricing strategies for sellers and developers.

2. Capital Gains Tax (CGT) Adjustments

The government is reportedly considering a cap on Private Residence Relief (PRR), which currently exempts most homeowners from CGT when selling their main residence. A proposed cap of £1.5 million could bring many prime properties into the CGT net, especially in London and affluent regional markets.

3. Inheritance Tax (IHT) Reforms

Further tightening of IHT rules is expected, including a possible lifetime cap on gifts and changes to taper relief. These could impact estate planning for owners of high-value homes and reduce the attractiveness of property as a wealth transfer vehicle.

4. Landlord Taxation

A new proposal to apply National Insurance to rental income could raise around £2 billion. This would disproportionately affect landlords with large portfolios and may discourage investment in rental properties.

5. Market Sentiment and Activity

Uncertainty around the Budget has already led to a pause in property transactions, with one in five homeowners delaying sales. Buyers and sellers are adopting a “wait-and-see” approach, particularly in prime markets where tax changes could significantly alter affordability and investment returns.

Outlook for Prime Residential Property

Despite the policy-driven caution, experts suggest that strategic buyers may find opportunities in the current climate. In Prime Central London and regional hotspots, price adjustments and reduced competition could offer value for those willing to act decisively.

However, the overall tone remains one of cautious anticipation. The Budget’s impact will depend on the final shape of tax reforms and whether they are phased in gradually or applied immediately. For now, the market is holding its breath, with stakeholders hoping for clarity and stability to unlock stalled transactions and restore confidence.