The Real Impact of Rachel Reeves’ Budget on the Property Market

Good morning,

For six weeks, the property market has been holding its breath, fuelled by rumours, fake leaks, but yesterday was the big budget day.

Budget Day ……………..and what actually happened tells a very different story.

We can put all the noise, panic and politics behind us now and delve into what has really happened.

Let’s dive in.

In this newsletter, you'll find...

• This Week’s Biggest News…….

• The Real Impact of Rachel Reeves’ Budget on the Property Market

• Property Listings

• Bottom Line

• What's Next?

• Feedback

This Week’s Biggest News…….

1. Savills’ latest five-year forecast echoes our view: the next year or two will stay flat, but improving affordability should revive the market. They’re projecting around 22% growth over five years.

2. Experian will be including rent payments in credit reports for those who opt in, creating a strong incentive not to miss payments. Possibly good for landlords, and also for tenants who deserve to have regular commitments recognised in the same way as mortgage payments.

The Real Impact of Rachel Reeves’ Budget on the Property Market

After six long weeks of rumour and nervous property buyers and sellers watching the market with clenched teeth, Budget Day finally arrived.

For property investors across the UK, today wasn’t just another policy announcement, it was the moment everything stops being speculation and becomes strategy.

And now that the dust has settled, we can finally see what’s actually changed, what didn’t, and what it all means for the future of your portfolio.

The Two Real Changes That Matter

The first big shift is the 2% rise in property income tax coming into force in April 2027. The basic rate will move from 20% to 22%, the higher rate from 40% to 42%, and the additional rate from 45% to 47%.

For the typical landlord earning around £25,000 in net rental income, it means paying roughly £500 more a year if you're in the basic bracket and more than double that if you’re a higher-rate investor.

Not insignificant, but hardly the apocalyptic blow many were bracing for.

Then there's the new so-called “Mansion Tax,” landing in April 2028. Homes valued over £2 million will face annual surcharges ranging from £2,500 to £7,500 depending on the property’s value.

Less than 1% of UK homes fall into this category, but its impact in London, where high-value properties fuel a major share of market movement will be substantial.

The Biggest Impact of All? What Didn’t Happen.

After weeks of building tension, some of the loudest and most terrifying predictions simply evaporated today.

• No 8% National Insurance slapped onto rental income.

• No sweeping changes to stamp duty.

• No universal £500k property tax threshold.

• No grab at capital gains on main residences.

In a landscape that thrives on fear and speculation, this Budget was surprisingly measured. Almost I can almost hear people saying, ‘What was all the scaremongering for?’.

How It Hits Landlords and Tenants Alike

The OBR offered a stark summary: landlord returns will be eroded, and over time that’s likely to reduce the supply of rental property.

When supply drops and demand stays high, rent inevitably climbs. We all know what happens next: smaller landlords, already squeezed by rising rates, regulation, and operating costs, will be the first to bow out.

But professionalized investors will adapt. Some will even sharpen their pencils and expand, stepping into the gap left behind.

Budget or not, the market continues to reward efficiency, scale, and smart long-term planning.

A Very Uneven Map of Winners and Losers

London and the South East will absorb the hardest hit from the Mansion Tax. High-value homes are far more common here, so the region’s upper market will feel it immediately.

Meanwhile, investors across the North, Midlands, and Wales will barely feel the Mansion Tax at all. With typical prices nowhere near £2 million, these regions remain as attractive as ever, especially for investors seeking strong yields and lower entry costs.

Even with the 2% tax rise, fundamentals here haven’t shifted: demand is strong, supply is limited, and affordability makes scaling more viable.

And for the majority of landlords holding properties under £500k, the changes are minimal. No new duties. No surprise surcharges. Just the ongoing challenge of navigating a market where too many renters chase too few available homes.

Property Listing

Bottom Line

A Moment of Clarity After Weeks of Chaos

If the Budget gave investors anything today, it was clarity.

After a month and a half of sensational predictions about jaw-dropping tax grabs and sweeping structural changes, the reality turned out far calmer.

The changes are meaningful, yes. But they’re not devastating and for strategic, data-driven investors, they’re absolutely manageable.

The fear is over.

Now the planning starts.

Next week, I’ll break down the early post-Budget market reactions—and highlight the opportunities beginning to emerge beneath the headlines.

What’s Next?

What You Should Be Doing Right Now

• Recalculate your post-tax rental profits
  Run the new numbers with updated tax rates. The uncertainty feels worse than the reality, and most investors will find the adjustments manageable once they see the actual impact.

• Reassess your investment structure
  Smaller landlords with tight margins will feel the squeeze most. Consider whether incorporation, scaling, or operational efficiency could strengthen your long-term position.

• Review your geographic exposure
  London and South East investors with high-value assets should revisit their five-year strategy. Investors in the North, Midlands, and Wales may find fundamentals unchanged—strong demand, tight supply, and better affordability.