Autumn Budget 2025: What UK Property Investors Need to Know

Today, Chancellor Rachel Reeves delivered her Autumn Budget focused on making “the right choices for a fairer, stronger Britain.” While the Budget contained various measures across taxation and public spending, several key announcements will directly impact property investors. At Joseph Mews, we’ve analysed the details to help you understand what this means for your investment strategy.

Infrastructure Investment: Building the Foundation for Growth

One of the most encouraging aspects of this Budget is the substantial commitment to infrastructure development. The Government has confirmed funding for major transport projects, including the Lower Thames Crossing, the Midlands Rail Hub, TransPennine upgrades, and Northern Powerhouse Rail. Additionally, the Leeds City Fund received backing, signalling a commitment to regional development.

For property investors, particularly those focused on off-plan developments in these regions, this represents a significant opportunity. Enhanced transport connectivity historically drives property value appreciation and rental demand. Areas benefiting from these infrastructure improvements are likely to see increased desirability among tenants and owner-occupiers alike, potentially delivering stronger returns over the medium to long term.

Energy Cost Relief: Easing the Burden

The Chancellor announced £2.3 billion in cuts to green levies on energy bills, which will lower household electricity and gas costs. This is particularly beneficial for landlords who include utilities in their tenancy agreements, directly reducing operational expenses. Even for landlords who don’t cover bills, lower energy costs mean tenants have greater disposable income, potentially improving affordability and reducing arrears risk.

This measure aligns with positive market conditions for rental properties, where demand continues to outstrip supply across most UK markets.

Housing Market Outlook: Growing Optimism

The Office for Budget Responsibility’s forecasts, despite being leaked early, paint an increasingly positive picture for the housing market. Property transactions are expected to increase from just under 1.1 million in 2024 to around 1.3 million by 2029, driven by loosening monetary policy and the impact of planning reforms.

Perhaps most encouragingly, residential investment growth is projected to accelerate significantly, reaching approximately 7% in 2027 and 2028 as planning reforms take effect and interest rates moderate. While growth is expected to normalise to around 2% by 2030, this represents a robust recovery phase that should benefit both developers and investors in the off-plan market.

Tax Considerations for Investors

The High-Value Property Surcharge

From April 2028, a new council tax surcharge will apply to high-value properties. Properties valued between £2 million and £2.5 million will face an annual charge of £2,500, rising to £7,500 for properties worth £5 million or more. These charges will be uprated by CPI inflation annually.

For most investors in the off-plan market, this measure will have minimal direct impact, as the properties typically fall well below the £2 million threshold. However, it’s worth noting for those with diversified portfolios or considering luxury developments.

Property and Dividend Tax Increases

The Budget introduces a 2 percentage point increase to the basic and higher rates of tax on property income, savings, and dividends from April 2026. Combined, these measures are expected to raise £2.1 billion annually. For property investors, this means the tax on rental income will increase, while those operating through limited company structures will also face higher dividend tax rates (rising to 10.75% and 35.75% respectively).

While any tax increase impacts net returns, the fundamental supply and demand dynamics in the UK property market remain exceptionally strong. As the OBR notes in its analysis, successive measures reducing private landlord returns are likely to constrain rental supply over the longer term. With demand continuing to significantly outstrip supply across most UK markets, this creates upward pressure on rents.

The result? Rental growth and capital appreciation are projected to substantially outweigh the impact of these tax rate increases for well-positioned investors. Properties in high-demand areas, particularly those benefiting from the infrastructure investments announced today, will continue to deliver strong yields. The 2 percentage point increase on property income pales in comparison to the rental growth many investors have experienced – and will continue to experience – in supply-constrained markets.

For investors focused on quality assets in the right locations, the overall returns from property investment remain compelling. The combination of rental income growth, capital appreciation, and the security of a tangible asset means property continues to offer fantastic income opportunities despite these modest tax adjustments.

The Budget acknowledges that while property transaction forecasts are positive, they remain below pre-pandemic levels, partly due to higher stamp duty costs and an ageing population that transacts less frequently. This suggests the market will favour well-located, competitively priced properties that appeal to younger, more mobile demographics.

Looking Ahead with Confidence

Despite the challenges inherent in any fiscal rebalancing, this Budget presents more opportunities than obstacles for strategic property investors. The commitment to infrastructure development, particularly in regions outside London, creates compelling investment cases for off-plan developments in areas benefiting from improved connectivity.

Lower energy costs and a recovering transaction market provide additional tailwinds, while the projected acceleration in residential investment from 2027 onwards suggests the sector is entering a growth phase. For investors focused on areas with strong fundamentals, robust transport links, and planning-reform benefits, the outlook remains positive.

At Joseph Mews, we continue to identify off-plan opportunities in locations positioned to benefit from these macro trends. Whether you’re a UK-based investor or investing from overseas, understanding how policy changes interact with local market dynamics is crucial to maximising returns.

What Should Investors Do Now?

This Budget reinforces that property investment remains a viable wealth-building strategy, particularly for those who:

• Focus on areas benefiting from infrastructure investment
• Consider the total cost of ownership, including potential tax changes
• Maintain a medium to long-term investment horizon to capture the projected growth from 2027 onwards
• Work with experienced advisors to structure investments tax-efficiently
• Select properties with strong rental fundamentals in supply-constrained markets

The property market has weathered significant challenges in recent years, and this Budget signals a Government committed to addressing housing supply while investing in the infrastructure that makes regions more desirable places to live and work. For investors who take a strategic, informed approach, opportunities abound.

If you’d like to discuss how these Budget measures might affect your investment strategy, or to explore off-plan opportunities that align with the infrastructure investments announced today, please get in touch with the Joseph Mews team.