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Back in November we looked at whether the Autumn Budget might deliver a lifeline for a struggling UK housing market.
And whilst there was no big bang for the property and construction sector, the Budget has quietly changed the financial reality for anyone who owns, builds or rents property.
Whether you’re a buy-to-let landlord, a developer with land in planning, or a construction business working on regional projects, the Budget will affect your cash flow, tax bill and long-term strategy.
Ben Cussons, Business Advisory Partner takes a look at what this could mean for you in practice as we head into 2026.
If you own rental property
On a very top level, your tax bill will be going up.
From April 2027, rental income tax will rise by 2%. And whilst that might not sound too dramatic, with many landlords having faced a higher tax liability following the changes to mortgage interest relief, implemented in 2020, this will wipe out a further chunk of profit.
For example: A landlord earning £40,000 in rental profits could pay around £800 more in tax every year. And higher-rate landlords will feel it even more.
This makes short-term buy-to-let models less viable. With property needing to be held for longer, rents raised where possible, or a restructuring of how property is owned potentially needed.
High-value homes will cost more to hold
From 2028, homes worth over £2 million will attract an annual council tax-style surcharge of £2,500 and with incremental increased rising up to £7,500 for properties valued at £5 million or more.
And whilst this is a scheme aimed at luxury properties, the threshold raises regional fairness concerns – after all, a £2 million property in Ipswich is very different from £2 million property in Twickenham.
That creates a real risk of:
- Being asset-rich but cash-poor
- Being forced to sell to cover annual tax bills
What does it mean for inheritance tax on my property?
Inheritance tax thresholds remain frozen until 2031. So, as property values rise, more families will be dragged into IHT – even if they don’t consider themselves wealthy.
And while business and agricultural property reliefs have been increased, residential landlords don’t benefit in the same way.
Meaning that more rental portfolios could be taxed on death, passing property to children will become more expensive and planning ahead will matter more than ever.
For those that own property personally rather than through a company or trust structure, this Budget quietly made succession planning more urgent.
If you’re a property developer
Planning should finally get faster as the government is putting money into local authority planning departments and digital planning systems.
This should lead to faster decisions, fewer projects stuck in limbo and less money tied up in land waiting for approval.
So, for developers, where delays can stall whole sites, this could materially improve cash flow and project viability.
But sales risk hasn’t gone away
There was no new support for first-time buyers. So, with affordability still stretched, developers may find sales are slower, there’s more pressure to offer incentives and margins may be reduced on smaller schemes.
Commercial developers also face rising business rates, which makes holding empty or partially let buildings more expensive too.
If you run a construction business
The big positive here from the Budget is the National Wealth Fund, which will channel money into transport, energy networks, clean steel, and digital connectivity – creating a predictable pipeline of projects through to 2030 – excellent news for civil engineering firms and larger contractors.
However, rising taxes and tighter public finances mean:
- Smaller contractors may struggle with cash flow
- Wage and material costs will stay under pressure
- Profit margins will remain tight
So, those businesses that move into net-zero projects, grid upgrades and digital infrastructure will be best placed to grow.
Frequently asked questions
Will rents go up because of the Autumn Budget?
Very likely. Higher taxes on landlords mean many will try to pass costs on to tenants, especially where demand remains strong.
Should landlords sell before 2027?
Not necessarily – but many will need to review whether their current ownership structure is still tax-efficient.
Is it still worth investing in property after this Budget?
Yes – but the strategy has shifted. Long-term, well-structured investments will outperform short-term, highly geared ones.
Will house prices rise after the Budget?
The Budget doesn’t provide a major boost to demand, so price growth is likely to be slow, especially outside prime areas.
The bottom line
The Autumn Budget 2025 thankfully didn’t “crash” the property market – but it will make it more expensive to own property and more important to plan properly.
- Landlords will face higher taxes and greater pressure on profits
- Developers will benefit from better planning systems but there’ll be weaker buyer demand
- And construction firms will gain long-term opportunity but must manage rising costs
If you own or build property, the biggest risk now is doing nothing and letting tax and cash-flow pressures creep up on you.
We’re here to help
Whether you’re a construction business, landlord or developer, our specialist team are here to help. Call Ben or one of the team on 0330 058 6559 or email hello@scruttonbland.co.uk
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