November, 2025
Well, the Budget has finally landed. After three months of rumour, speculation and an impressive amount of kite flying from Westminster, we finally have clarity. And I think we can all agree it is a relief to be able to talk about what has happened rather than what might.
Since September, we have heard it all. Double council tax. Higher Stamp Duty on homes over £500,000. Capital Gains Tax on your main residence. A mansion tax by another name. It felt as though every week brought a new whisper and every newspaper carried a different prediction. The result has been a strange pause in the £2 million plus market, as buyers and sellers quietly sat on their hands, waiting for the fog to lift.
Now it has. And while there are meaningful changes on the horizon, this is not the property earthquake many feared.
Let’s break down what has actually happened and what it means for anyone who owns, is selling or is thinking of buying a high value home.
From 2028, two new surcharges will be introduced:
This money will go straight to central government rather than local councils. The Chancellor expects it to raise around £400 million a year.
There is also a two percentage point increase in tax on rental income and property investment returns, which will squeeze net yields for landlords and investors.
And that is it. No Stamp Duty hikes. No doubling of council tax. No Capital Gains Tax on your own home. No dramatic wealth tax. For all the noise, the headline changes are fairly contained.
But contained does not mean insignificant. These measures will influence behaviour, especially in certain price brackets. Here is how.
This is the sector where we expect to see the biggest shifts. The new surcharge will not reduce affordability for genuine buyers in this bracket. Many are:
Equity-rich London leavers
An extra £2,500 a year is unlikely to change whether they can buy a home. In fact, if interest rates continue to fall over the next 18 months, the reduction in monthly mortgage payments may offset the new charge entirely.
The real change here is psychological. Buyers naturally react to thresholds. £1.995 million feels different to £2.05 million, even though the actual difference is small. That subconscious hesitation shapes buyer behaviour. It always has.
This means sellers need to think more carefully than ever about pricing. When you sit just on or around the £2 million line, your asking price suddenly becomes part of a bigger equation. Do you price just under the threshold to avoid the new surcharge bracket or do you stay above it and hold your ground?
There is no generic answer, but here is the crucial point most people miss. Rightmove uses £2 million as a search boundary. If you price your home at £1.995 million, it will not appear to buyers searching from £2 million upwards. And in the premium market, these “from £2 million” buyers are often the strongest and most motivated.
So yes, a threshold price can be smart if your property genuinely sits on the line, but if your home is clearly in the next tier, pricing just under can do more harm than good by reducing visibility. You could lose far more in buyer eyeballs than you gain by appearing below the tax line.
At this level, the surcharge is more of a footnote than a deciding factor. Buyers purchasing at £5 million or £8 million or £10 million are making decisions based on architecture, land, privacy and lifestyle. £7,500 a year, while irritating, does not alter their ability to transact.
But here too, we may see some segmentation. Those hovering around the £5 million mark will think more carefully about pricing. And some long-term owners may now decide that 2026 or 2027 is a sensible time to sell rather than absorb a future annual cost.
Where this Budget may have its greatest impact is among elderly homeowners who have been sitting tight for decades.
At Stowhill Estates, we regularly visit homes where the owners are in their mid to late eighties, living in vast, beautiful, freezing houses they have owned for thirty or forty years. They know they need to move, or “resize” as we prefer to call it, but emotionally, there has been no compelling reason to do so. Until now.
An extra £208 a month from 2028 is not catastrophic, but it is enough to prompt a conversation. Enough to create a moment of decision. Enough to make people ask whether it is time to move somewhere warmer, easier to maintain and more suited to the next chapter of life.
If this unlocks supply in some of Oxfordshire’s most sought after villages, it may actually be one of the healthiest outcomes of the entire Budget.
The two percentage point rise in tax on rental income will bite. Margins for smaller landlords are already under pressure, especially for older, less efficient homes. Some will use this moment to exit the market. Larger, more sophisticated landlords are likely to consolidate, trim weaker properties and streamline portfolios.
Despite the tax rise, rental demand in Oxfordshire and the Cotswolds is expected to remain strong. These are lifestyle areas with enduring appeal and good tenant profiles. Well presented homes in the right villages will continue to let quickly and at stable rents.
Periods of uncertainty create space. Space for strategic sellers to get ahead. Space for buyers to make thoughtful decisions. And space for the market to absorb policy changes and move forward.
Over the next six months, here is what we expect:
For sellers, the key will be clarity. Knowing where your home sits in this new landscape. Knowing how buyers in your bracket will behave. And knowing whether a threshold pricing strategy helps or hinders you.
For buyers, the next year will offer well-timed opportunities, particularly for those who value lifestyle over timing noise. Hybrid working, schools, quality of life and the enduring appeal of countryside living have not changed simply because a surcharge has been introduced.
This Budget is not a hammer blow to the high value market. It is a reset. One that removes uncertainty, introduces modest future costs and encourages more strategic decision-making.
The market will not collapse. It will simply evolve. And for thoughtful, well advised homeowners, that evolution may create opportunities.
If you would like tailored guidance on how this Budget affects your home, your pricing or your plans, we are here to help.
