The Autumn Budget 2026: what it means for the property market

After a relatively calm run-up to this Autumn Budget compared with last year, Chancellor John Healey presented his 2026 Budget this week. It was aimed, he said, at providing ‘breathing space for working people’.

The two main property announcements were on the planned equity loan scheme, Your First Home, allowing eligible first-time buyers to buy a new-build home with a 2.5% minimum deposit, and an increased 2% tax on property income. Factoring in last year’s 2% increase and depending on whether they are basic, higher or additional level taxpayers, landlords now face paying between 24% and 49% tax on their rental income from April 2027.

Otherwise, Healey’s Budget had few property headlines. There was no change to the High Value Council Tax Surcharge, the so-called mansion tax, due to come into effect in April 2028 on homes valued at £2 million or more, and no mention of changes to stamp duty.

In the immediate aftermath of the Budget, Knight Frank’s experts shared their views: Liza-Jane Kelly, Head of London Residential Sales, James Cleland, Head of Residential Country Business and David Mumby, Regional Partner Lettings, alongside Knight Frank Finance Managing Partner Simon Gammon’s view of the mortgage market.

What is your initial reaction to the 2026 Autumn Budget?

David: The chief headline from a property perspective is the increased taxation on landlords and that’s thoroughly disappointing. It’s a further punitive tax which for many will only create less incentive to make an investment in London. If the government were looking to stimulate a market that’s very important to them, both in terms of revenue and from the wider business perspective, this is not the way to do it. The net impact, I believe, will be to further increase rents, something the government has said they want to avoid. Yet every single index shows rents are increasing in London and this new tax on property income, coupled with the Renter’s Rights Act, will only make that worse.

Liza-Jane: They did miss obvious ways to stimulate the market, amending stamp duty rates for example, yet at the same time, there’s relief that the uncertainty about potential changes has gone. People now know where they stand and can get on with their lives. We’ve seen that desire already this autumn. People are buying and selling.

James: My initial response is that other than the 2% on rental income, the lack of anything significant relating to property is both good and bad. Good because there were no unexpected surprises but bad because there wasn’t anything positive. Overall, it felt fairly benign, but it will be useful to see detailed analysis on the wider implications for interest rates and therefore mortgage rates. That’s the most critical aspect for the mainstream sales market: will Healey’s wider changes have a positive or negative impact on the mortgage market, and therefore on the sales market.

What does this mean for the property market in the short-term?

James: The market has been subdued in the past few weeks as people waited to learn what the Budget had in store. The question now is, has the Budget done enough for people to feel that the general situation is unlikely to worsen. People have been trying to identify the bottom of the market for some time and will their sense be that this is it, that it’s a good time to buy, and as a result, we’ll see an acceleration in market activity, or will they be concerned that the government still has not tackled the big issues and therefore opt to hold off for a little longer. It feels too early to tell which way it will go.

Liza-Jane: Undoubtedly, once people feel we have reached the bottom of the curve, things will pick up. We have certainly seen activity lift in our prime and super-prime markets with more enquiries coming in and more deals being done. I think there’s an acceptance among vendors that they need to be more realistic on pricing, and they have a desire to get on with their lives. There’s no single market in London. Instead, there’s the domestic needs-based market and then the international super-prime market operating mainly in prime central London. What happens in Mayfair or Belgravia is very different to what happens in Wandsworth or Islington. The super-prime market is active with an international clientele. There’s a noticeable sentiment that compared with what’s happening elsewhere in the world, London is a safe haven.

David: The revenue raising measures that Healey introduced today, the bank tax and the additional taxation on landlords, will only make living costs more expensive and have a negative impact, felt in everyone’s pockets. However, rents are not going to rise overnight as a direct result. I’m sure some landlords will be looking at this tonight and thinking, my service charge has gone up again and now this extra taxation means I just want out, and that might, in the coming months, restrict supply on the rental side. However overall, I don’t think that feeling is universally strong enough to see a collective knee jerk reaction from landlords.

What advice do you have for those navigating the post-Budget property market?

Liza-Jane: The UK is a great country and London is where so many people want to be. The market is more resilient than perhaps many realise. It was a ‘steady-as-it-goes’ Budget that has removed the underlying uncertainty of the previous weeks. There’s interesting value to be had. Get good advice. I believe that now is the time to act and realise your property goals.

David: It’s the age old recommendation. Make sure you get solid advice from a trusted adviser. Today more than ever, landlords need an holistic view that considers their full property portfolio to ensure they are maximising every asset. The positive, for investors, is that rents are at an all-time high. We continue to see annual growth with yields increasing every quarter. We’re seeing clients achieve 5, 6, 7% yields.

James: For individuals looking to buy or sell a family home, I would say get on with your life. As Liza-Jane said earlier, we are trading, deals are being done, the market is active. It is far from being all doom and gloom. There are plenty of good, sensibly priced homes out there with realistic vendors and buyers can certainly find what they want. Go get them.

What does the Budget mean for the mortgage market?

Simon: The relatively low-key Budget was positive for the mortgage market, with government borrowing costs edging lower following the Chancellor’s speech. This stability removes one important source of uncertainty for borrowers, though persistent inflationary pressures mean mortgage rates are likely to remain elevated. Lenders’ margins remain extremely thin, leaving them particularly sensitive to changes in the inflation outlook. However, competition for market share remains intense, and any improvement in the inflation outlook that brings down funding costs is likely to be passed on to borrowers.

For borrowers, we recommend securing a rate at the earliest opportunity. Most are eligible for six months and can be renegotiated should mortgage rates fall. Getting advice and finance in place early enables you to act when the right opportunity emerges.