UK Budget 2025: Impact on the Property Market | Key Changes for Buyers, Sellers & Landlords

Fri 28 Nov 2025

The UK Budget 2025 brings a series of important changes that will influence the property market, shaping decisions for buyers, sellers and landlords alike.

In the run-up to the Budget, 59% of agents reported a noticeable slowdown in activity, driven largely by widespread speculation around potential tax reforms. History shows that when uncertainty rises, the property market naturally pauses for breath.

The impact was felt most strongly at the upper end of the market, where rumours of a mansion tax – alongside other proposed changes – created understandable caution. Ultimately, the mansion tax was confirmed for properties valued at £2 million and above, a higher threshold than originally suggested, with a council tax surcharge starting from £2,500 for the lowest band.

While unwelcome, we do not expect these measures to create significant distortion within the prime market. Some mild price adjustments may follow, but overall activity should remain resilient.

Landlords, however, have once again been placed under pressure. The Budget introduced a further 2-percentage-point increase in the tax rate on property income, adding to the long succession of fiscal and regulatory changes affecting the sector.

Additional funding has been allocated to accelerate planning reform, accompanied by optimistic projections of a rapid rise in new housing starts. However, with viability challenges persisting, such a swift recovery appears unlikely.

The Office for Budget Responsibility forecasts average house price growth of 2.5% per year through to 2030, pointing towards steady long-term market performance.

With clarity now restored around the latest tax measures, we expect market confidence to strengthen, activity levels to pick up, and the usual drivers of the property market to resume their influence.

Now is an ideal time to reassess your property strategy—contact INFINITY for expert insights.