We asked some of the property experts at Hindwoods to give their views on what the Autumn Budget 2025 means for residential and commercial property, for the housing market as a whole, and for people living and investing in South London

Posted on 28 November 2025

Key points

• Homes worth more than £2m will be subject to a ‘mansion tax’ from April 2028
• No changes to stamp duty 
• Landlords to pay an additional 2% income tax on rental income 
• Increase in business rates for high-value properties

When the Chancellor finally opened her red box to deliver the 2025 Autumn Budget it was against a backdrop of nervous anticipation across both the commercial and residential property sectors. Homeowners, buyers, investors, and developers had been waiting for the Government’s fiscal announcement, which was expected to deliver sweeping changes that could reshape property-related taxes, incentives, and growth priorities. Here's what happened and what it really means for you. 

The market – Tracey Lee, Financial Director 
t.lee@hindwoods.co.uk

The lead-up to the November 26 budget caused unusual hesitation in the market – it is going to take some time for this situation to change. Research by Rightmove suggests that nearly one in five UK homeowners put their selling plans on hold due to uncertainty about government policy direction. At the same time buyer sentiment cooled with prospective buyers worried about possible changes to stamp duty or other purchase costs. Expensive house prices were being ‘down-valued’ in anticipation of a ‘mansion tax’ on properties over £2m.

The Royal Institution of Chartered Surveyors (RICS) reported that in commercial property both occupier and investor sentiment turned negative for the first time since the pandemic recovery period. Tenant demand has been falling, and investor caution climbing, especially outside prime London offices and industrial sectors, ahead of the Budget.

Residential Property – Sharon Richards, Senior Residential Property Manager 
s.richards@hindwoods.co.uk

The biggest budget headlines in residential property have gone to the so-called Mansion Tax which will be payable from April 2028 on homes worth more than £2m. This charge which comes on top of council tax will be payable by the owner of the property rather than the occupier and will be an annual charge of £2,500 for properties over £2m, rising to £7,500 for those over £5m. 

Landlords will also have to pay a higher tax on property income, which will increase by two percentage points from April 2027. 

The Budget revealed that the Government will soon consult on reforming the VAT rules to encourage development on land earmarked for social housing. 

What does this mean?

Rightmove data shows less than 0.5% of all home sales agreed this year have been for properties with an asking price of more than £2m – but some two thirds of qualifying transactions happened in London this year alone. It means the new tax will disproportionately impact London and the South East, with 85% of the affected properties located in the region.

There is likely to be some slowing of the market as it works out the implications of the Mansion Tax. But the average UK house price is still expected to rise from £260,000 in 2024 to just under £305,000 in 2030.

Changes to the tax on landlords could add further impetus to the already strong direction towards incorporation.  

Commercial property – Charlene Nicholls, Associate Director, Commercial Surveyor 
c.nicholls@hindwoods.co.uk

Many businesses have been adversely impacted by high energy costs, increases in the minimum wage and employers’ national insurance, against a backdrop of consumer caution due to economic uncertainty and the cost-of-living crisis. So, Business rates were a huge concern for the industry ahead of the Budget because the 40% reduction in rates to retail, hospitality and leisure businesses is due to expire in April 2026. 

But a permanent reduction in business rates for around 750,000 retail, hospitality and leisure properties (RHL) across the UK will be funded by an increase in rates on premises worth more than £500,000, which include warehouses used by online giants such as Amazon. 

There will also be an extension to Small Business Rates Relief (SBRR) ‘grace period’ on second properties. Currently, businesses that take on a second property benefit from SBRR on their main property for 12 months. This will increase to three years if certain criteria is met: 

• None of your other properties have a rateable value above £2,899
• The total rateable value of all your properties combined is less than £20,000 (or £28,000 in London)

Other measures in the budget that will have an impact on the commercial sector include: the increase to the National Living Wage, from April 2026; and the introduction of a 100% business rate relief for eligible electric vehicle (EV) charging points and EV only forecourts. 

What does this mean?

At Hindwoods we champion businesses of all sizes, from those that need large warehouse operations to independent boutiques and cafes on the high streets of South London. The permanent lowering of business rates for retail, hospitality and leisure properties is likely to be good news for the high street – it gives more certainty to the RHL sector. A transitional relief scheme will ensure bills are capped for businesses that will be most affected by the 2026 revaluation. 

For more help understanding how the Budget might impact your property needs, please contact one of our team using the email addresses above, visit www.hindwoods.co.uk or call us on 020 8858 3377