The long-awaited Autumn Budget 2025 has now been released, and it brings significant changes for landlords and property investors. From new tax measures to updates that will affect future borrowing and rental profitability, this Budget outlines the government’s direction for the private rental sector in the coming years.
Below is a clear breakdown of what has changed, what has not, and what it all means for your investment plans.
Property Tax: Stamp Duty and Capital Gains
Ahead of the Budget, there was speculation that Stamp Duty Land Tax (SDLT) might be reformed or replaced. However, the Chancellor confirmed that SDLT will remain unchanged. There are no new thresholds, no restructuring and no alternative system being introduced.
Capital Gains Tax (CGT) was another area of speculation, but the Budget did not announce any changes to CGT rates or allowances for residential property sales. This means disposal planning and portfolio restructuring can continue under the current CGT framework.
What this means for landlords:
With SDLT and CGT remaining as they are, there is stability in terms of acquisition and disposal tax planning. However, the biggest shifts this year come from changes to how rental income is taxed, which will impact long-term profitability more significantly.
National Insurance on Rental Income
A major concern before the announcement was the possibility that landlords would be required to pay National Insurance on rental income. The good news is that this idea has been ruled out.
Rental profits will not be subject to National Insurance contributions.
However, the government has introduced an alternative measure that will still increase the tax burden for property investors.
A New Property Income Tax Regime
Instead of applying National Insurance, the Budget launched a new property income tax structure that increases the tax rate on rental income by 2% from April 2027.
The new rates will be:
This increase applies to income from property and savings, and it also affects dividend income.
Impact:
This is a clear tax rise for landlords. For many, rising maintenance costs and higher mortgage payments were already compressing margins, and the new tax rates will reduce net rental income further. Landlords with highly leveraged portfolios or lower yielding properties may feel this most.
Mortgage Rates and Lending Outlook
Although the Budget does not directly set mortgage rates, its tax measures will influence lender sentiment and affordability assessments. With around 350,000 borrowers due to exit fixed-rate deals this year, refinancing will be a key concern.
The increased tax burden could tighten affordability ratios and impact how lenders stress test rental income. Landlords with refinancing due in the next 12 months should assess their options early.
Broader Market Sentiment: High Value Property Surcharge
The government also announced a new annual surcharge on residential properties valued over £2million.
This is already being referred to as a mansion tax and represents a shift toward taxing expensive property holdings more heavily.
For most buy-to-let landlords, this will not apply. However, it signals a broader government focus on increasing tax revenue from property wealth.
Reduced investment appetite, combined with some landlords exiting the market, may lead to a tightening of supply, which can push rents upward.
What You Should Do Now
Over the next few months, the priority is strategic planning. We recommend that landlords:
Let’s Review Your Portfolio Strategy
Whether you’re looking to grow, refinance or protect profits, now is the time to act on the changes from the Autumn Budget 2025.
Let’s discuss how the updates impact your portfolio, and how we can adapt your strategy to stay ahead of them.
📞 03301331843 📧 info@theffs.co.uk 🌐 https://www.theffs.co.uk/
