The Budget gives households and property professionals a clearer framework for the year ahead. It does not fix the UK’s deeper structural challenges, but it introduces a more predictable annual rhythm for fiscal updates. If governments stick to that approach, decision making becomes more straightforward after several years of uncertainty.
The Office for Budget Responsibility has upgraded its 2025 growth forecast from 1 percent to 1.5 percent. Even with that improvement, the fiscal backdrop remains tough. UK debt stands at roughly £2.6 trillion, with around one in ten pounds of public spending going on interest repayments. Debt is expected to peak near 97 percent of GDP before easing slightly. The OBR projects a modest budget surplus by 2028–29, although it assigns only a moderate probability to meeting the fiscal rules. This underlines the fragility of the public finances.
Tax Changes and Their Possible Effects
From April 2026, dividend tax will rise by two percentage points, followed by equivalent increases on rental and savings income from 2027–28. Landlords operating on tight margins will feel this. Some may absorb the cost. Some may increase rents. Others may judge that certain properties no longer generate a sufficient return. If enough landlords reduce their portfolios in specific areas, rental supply could tighten and rents could rise. Outcomes will vary by location, landlords financing structure and local demand.
Personal income tax and National Insurance thresholds remain frozen until 2031. As earnings grow, households will move into higher tax bands. This fiscal drag will influence purchasing power and affordability over the medium term.
High Value Council Tax Charge
The government is introducing a High Value Council Tax Surcharge (HVCTS) in England for residential properties worth £2 million or more, from April 2028. This charge will be based on updated valuations to identify properties above the threshold and will be in addition to existing Council Tax. New charges start at £2,500 per year, rising to £7,500 per year for properties valued above £5 million, and will be levied on property owners rather than occupiers. The OBR expects the measure to raise roughly £0.4 billion a year once fully operational.
This adds an ongoing cost for owners of higher-value properties. The impact around the £2 million threshold will depend on buyer sentiment, local demand and broader market conditions.
Planning Reform and Housing Supply
Planning reform falls outside the Budget, but it remains central to increasing housing supply. There was speculation that the November Budget might include new measures to accelerate decisions. Instead, the government committed £48 million to expand planning-department capacity and recruit around 350 additional planners. The Budget did not introduce new performance guarantees or timelines.
Bringing in more planners should relieve pressure on local authorities, but speed will only improve if the wider structural barriers are tackled. The system still relies on outdated processes, fragmented regulation and inconsistent resourcing. Without reforms that address these constraints, additional staff alone will not deliver the uplift in delivery the market requires.
For now, the planning system continues to face delays. Any improvement in supply will depend on how effectively the wider reform package is executed.
Energy Efficiency and Running Costs
The Warm Homes Plan continues to drive improved energy performance across the UK’s housing stock. Expectations had grown that the Budget might introduce stronger retrofitting incentives. No new measures were announced. Even so, energy efficiency will remain a significant factor in running costs, renovation decisions and buyer expectations.
EPC standards, upgrade requirements and future regulation continue to feed directly into valuation, mortgage underwriting and long-term ownership decisions. Households considering renovation will need a clear view of future operating costs and compliance.
Stamp Duty, Mortgages and Market Activity
As usual, there was speculation ahead of the Budget about possible stamp duty changes or support for first-time buyers. None were delivered. The government focused on tightening the fiscal position rather than stimulating the market.
Even so, the absence of unexpected announcements gives households, lenders and agents a clearer short-term landscape. A defined policy timetable reduces hesitation. Activity typically picks up after the Christmas period, and the clarity provided by this Budget supports that seasonal pattern.
Does This Budget Support Stability and Planning?
This is a tough, tax-focused Budget designed to restore fiscal credibility. In the near term, it gives households a more stable backdrop for decisions on buying, selling, renting and refinancing. The longer-term picture depends on delivery, consistency and the wider economy.
The property market adapts quickly. It rarely stands still.
Market Outlook
The Budget does not meet every expectation, but it sets a clearer direction for 2026. With no major surprises and a predictable fiscal timetable, momentum should begin rebuilding as the new year progresses. Many home movers had been waiting to see if property-specific measures would emerge. They now have clarity and can progress with decisions.
If you plan to buy or sell in the coming months, now is the right moment to get ahead. Understanding your home’s condition and value early will help you make confident, informed choices as activity strengthens.
Get in touch with our team and take the next step in your property journey with clarity.
