.svg)
%20(1).png)
When is the Budget and how will it impact agents?
This year, the Budget will take place on 26 November 2025 when the government is likely to announce a number of tax rises and spending cuts that some analysts predict will add up to around £20bn.
Due to promises made by Labour during the 2024 election not to raise income tax, National Insurance or VAT for ‘working people’, a number of alternative tax changes have been raised in the run up to the Budget at could impact the property market.
Sales
Is Stamp Duty changing in 2025?
Possibly, and in a big way. The government is considering scrapping Stamp Duty for buyers and replacing it with a national property tax paid by sellers on homes worth over £500,000. Rates could range from 0.54% for properties up to £1m, and a higher rate for those above. This is designed to replace both stamp duty and council tax.
The Conservatives have proposed abolishing stamp duty entirely and making up the lost revenue through spending cuts, but this is unlikely as they are not the government.
Changes to stamp duty are likely to drive demand for cheaper properties but stall sales in more expensive areas including London and the South East.
Tip: Agents will need to adapt, either by making more sales faster by using technology to speed up buyer inquiries, listings and sales progression. They may also need to review the percentage fees they charge, if fewer high-priced properties are sold as expected.
Council tax changes
The government is considering additional council tax bands in England, rather than revaluing homes for council tax gains. A similar policy was launched in Wales in 2005, where an ‘I’ band was introduced for properties valued over £424,000 in 2003. Any money raised from new council tax bands would be retained by local authorities, but this could allow the Treasury to reduce grants to councils, lowering overall central government spending. This is likely to have the most impact in areas with higher house prices.
Tip: When renting homes rated council tax Band H, consider if prospective tenants can afford the additional tax burden. Advise buyers of expensive homes that the council tax liability of the property could change post-Budget.
What’s happening with Capital Gains Tax (CGT)?
There are rumours that some homeowners will need to pay CGT if they sell their main residence. Currently, a person’s main residence is exempt from CGT, but Treasury minister Torsten Bell did not rule out introducing a tax on gains in the values of homes worth more than £1.5m. Higher-rate taxpayers would pay 24% on any gains, while basic rate taxpayers would face a levy of 18%.
This could discourage asset-rich but cash poor homeowners, including pensioners, from downsizing as they would not free up as much cash from their property. Reapit has instead suggested stamp duty discounts for pensioners in large expensive homes encouraging them to downsize. The impact of introducing CGT to a person’s main residence would be felt most in London and the South East.
Tip: If you have customers considering selling an expensive main home that has appreciated significantly since they bought it, a price reduction and quick sale now may cost them less than the tax burden they could face after the Budget.
Is Inheritance Tax (IHT) changing?
Also quite possibly. The nil-rate band for the initial £325,000 of an estate may remain frozen or even be reduced. Additionally, the government has already announced that pensions will count toward estates from 2027, which is also likely to see more people paying inheritance tax on the estates of their deceased relatives.
With a higher tax burden on will beneficiaries, we may see more home sales from deceased estate, as children will need the money to pay the 40% inheritance tax on inheritances above the threshold. However, if they are direct descendants, they could benefit from an additional £175,000 residence nil-rate band if the deceased lived in the property during their ownership.
Tip: Probate sales can be complex, but could become more likely if this tax change goes ahead. Consider whether it’s an area your agency should focus on or specialise in.
Can prospective homeowners still use an ISA to save for a house deposit?
Yes. Lifetime ISAs still allow £4,000 savings per year with a 25% bonus contribution from the government. Additionally, there have been calls to raise the maximum £450,000 property price cap on properties that can be bought, as it prices savers out of homes in London and the South East. Anyone using a Cash ISA to put away savings for a deposit may be disappointed, as rumours are that the annual deposit amount for these accounts will be cut to £10,000.
Tip: If you have buyers putting money into a Cash ISA for a deposit, they should make the most of the current £20,000 deposit limit before the budget.
What about homeowners relying on the ‘Bank of Mum and Dad’ to help with a deposit?
For now, anyone receiving a gift from a parent will be exempt from paying inheritance tax if the person gifting the money survives more than seven years after giving it to them. But the government may extend the seven-year rule to 10 years or introduce a lifetime gifting cap.
Tip: It is highly unlikely these policies would apply retrospectively. Agents with parents/children looking at properties should advise them of the value of gifting any deposit amount before the Budget.
Are there any other changes estate agents should be aware of?
The government’s ongoing consultations on material information in property sales and reforming the home buying and selling process could also be mentioned in the Budget.
Changes to the Planning and Infrastructure Bill and a new nature bill, which will rewrite environmental regulations to make housing and infrastructure development easier, are also likely to be included. Some estimate the measures in these bills will add around £3bn a year to the UK economy.
The proposed changes to the home buying and selling process are designed to help make it cheaper and faster to buy a home. While this may result in a requirement for more information upfront from estate agents, it should also mean more committed sellers and fewer delays in sales progression. As a result, agents should spend less time overall managing the sales process, so you can sell more homes with the same staff levels.
In the long term, planning reform should help bring more new properties to market, with several new towns being planned.
Tip: If your agency is near development site or new town, identify any developers as plans are submitted and start building relationships early, so you are front of mind when plots need to be sold.
Lettings
Will landlords pay more tax in 2025?
The Budget may levy National Insurance on all rental income for the first time. The Resolution Foundation, which has championed this policy, suggests it would raise £3bn.
Under the current system, landlords may have to pay National Insurance tax if, according to the BBC:
- being a landlord is their main job
- they rent out more than one property
- they are buying new properties to rent out
Levying National Insurance on all rental income could dramatically reduce landlord yields, making some raise rents and others sell their properties, which would reduce rental supply. Landlord sales may also give tenants more opportunities to buy, which could reduce demand for rental properties. Other landlords may consider incorporating any properties owned in their name which may reduce the overall tax burden.
At present, people who reach State Pension age are exempt from paying National Insurance. If this exemption remains in place while National Insurance is introduced on rental income, more landlords may opt to retain their rental properties into retirement.
Tip: This could open new opportunities for agents to manage the rental properties owned by older retirees, who may struggle to manage the properties themselves.
Will rents be more affordable for those on universal credit?
The government is under considerable pressure from Labour MPs to remove the two-child benefit cap. If they do, tenants claiming universal or child tax credit will be able to claim additional Child Benefits if they have three or more children. This could make rents more affordable for larger families.
Separately, several organisations have called for the Local Housing Allowance (LHA) to be reset so that tenants claiming it will be able to afford the cheapest 30% of rental housing in an area. LHA rates have been frozen since 2024, while rents have continued to climb. Current estimates claim that those on LHA can only afford the cheapest 3% of rents, making it difficult for the poorest tenants to pay the rent or secure new properties. However, Angela Rayner, the former Deputy Prime Minister and Housing Secretary, ruled this out earlier in 2025, claiming that raising the LHA would funnel more money to private landlords.
Tip: As LHA rates are unlikely to be changed, tenant vetting will be essential to ensure the tenants you place are able to afford the rent, both now and in the long term, if they are claiming universal credit.
Are there any other changes to lettings?
The Chancellor may make reference to the Renters’ Rights Bill, which will contain the biggest changes to the private rented sector in 30 years and should have received royal ascent by the time of the Budget.
While some landlords may choose to sell rather than adapt to the Bill, others are actively raising funds to expand their portfolios, according to UK Finance.
Tip: This legislation presents a valuable opportunity for your sales team to engage with these motivated investors, earning commission on the sale of properties from landlords looking to exit, but also establishing relationships with new and expanding landlords. Of course, this will also help secure the properties for long-term management.
Please note that this content is provided for general information purposes only and does not constitute legal or professional advice. No recipient should act, or refrain from acting, based on this content without seeking appropriate counsel. The authors and contributors disclaim all liability for any actions taken or not taken on the basis of this information.
