'It'll either calm the storm or conjure something that chills the market overnight': The property experts' views on what The Budget will mean

The Autumn Budget is now less than 24 hours away — and what a wait it’s been. Rumours have been swirling since at least August about what the Chancellor of the Exchequer, Rachel Reeves, will unveil. August! Many of us were still reaching for our buckets and spades on the beach when the so-called kite-flying of policies started.

Three months on, and with plans for an income tax hike either ditched or confirmed (depending on which leaks you believe), speculation about what property tax changes are on the horizon has reached fever pitch.

On the plus side, at least it'll all be over soon. I wrote back in September at the effect that property tax speculation has had on the market, and last week a Rightmove survey suggested that 1 in 5 would-be house buyers had put their plans on ice.

By Thursday morning, we'll all know where we stand. But where will that be?

The latest rumours about Reeves' include:

• extending capital gains tax to main homes reportedly worth £1.5m-plus
• introducing a levy of 1% on the slice of a property’s value above £2m
• overhauling council tax, with ideas thought to include revaluing homes in council tax bands F, G and H and introducing a surcharge on some of the most expensive properties, and creating new council tax bands
• applying national insurance to rental income
• scrapping stamp duty in favour of a tax paid by sellers of homes worth more than £500,000 — though one report suggests payment can be deferred until the property is sold or transferred to avoid anyone having to sell their house to cover the bill

Which of these policies — if any — actually come to fruition is at this point anybody's guess, and change isn't necessarily going to be quick. Several of the options call for a re-evaluation of properties, something which hasn't happened since 1991 when the current Council Tax bands were introduced — and the work needed to do that could take until 2028, even if the only properties re-evaluated were those in Band F and above.

And there are still many unanswered questions. Will the various 'mansion tax' options see a return to a 'cliff-edge' tax threshold, which was once the source of so much unfairness when it applied to Stamp Duty? What of the government's commitment to building 1.5 million homes? And will the more drastic changes be reined in, the can kicked further down the road to a time when we hope there is more growth in the economy?

'It’s felt like a marathon getting to this point'

The constant stream of speculation has had a dampening effect on the housing market. According to Zoopla figures, uncertainty surrounding the Autumn Budget has prompted many buyers to adopt a 'wait and see' strategy — leading to the first annual fall in the number of sales agreed since October 2023.

The slowdown in activity has been focused at the higher end of the housing market. Sales agreed for £2m-plus homes are down 13% year-on-year, while homes between £500,000 and £2m have seen sales agreed fall by 8% year-on-year, separate data from Rightmove this month shows.

‘Everyone in the property world has been laser-focused on the Budget,' says Amy Reynolds, head of sales at estate agency Antony Roberts in Richmond, London.

'It’s felt like a marathon getting to this point. And while the wait hasn’t brought the market to a standstill, it has absolutely created hesitation. Over the past few weeks we’ve seen noticeably fewer market appraisals, simply because sellers want to know what is coming before making a move.’

Reeves could 'either calm the storm or conjure something that chills the market overnight'

It’s a similar story in the country house market. ‘Buyers and sellers alike are waiting to see whether she [Reeves] will calm the storm or conjure something that chills the market overnight,’ explains George Nares, co-founder of Blue Book Agency. ‘You can almost feel the collective pause before we discover what’s inside.’

Jennie Hancock, founder of West Sussex buying agency Property Acquisitions, told last month of some ‘great buying opportunities’ but added that many buyers are hesitant to take the plunge, expecting prices to fall further.

The latest data suggests that prices are taking a hit. Average asking prices of homes listed for sale on Rightmove, a more current ‘temperature check’ of the housing market, fell by 1.8% (£6,591) this month. It’s the largest November drop that the property portal has recorded since 2012. The reasons are ‘pretty clear’, says Rightmove: Autumn Budget rumours and a decade-high number of homes for sale.

Furthermore, sellers are slashing asking prices in a bid to entice buyers. More than a third (34%) of homes on the market have been reduced in price, with an average discount of 7%. Both figures are the highest since February 2024, says Rightmove.

Fortune favours the brave, to the tune of a '20% price reduction from the peak of the market'

But not everyone is sitting tight waiting to see what will unfold on 26 November.

There are still serious sellers out there house hunting, says Richard Donnell, executive director at Zoopla: ‘Buying a home is a lengthy process and there are a record number of homes for sale which means lots of buyers looking for their next home,’ he explains.

According to Hancock last month, a few ‘truly fantastic’ homes have changed hands off-market recently, which are ‘a steal compared with the Covid boom – in some cases 20% down from the peak of the market in autumn 2021’.

Jonathan Hopper, CEO of Garrington Property Finders, reports that with the exception of a few strategic buyers who used the lack of competition and abundant choice to snap up homes at big discounts, many estate agents operating at the higher end of the market in southern England have had a ‘tumbleweed’ couple of months. But things started to change at the start of November.

‘Those who need to move — both sellers and buyers — are getting on with it and trying to get comfortable with the fact that property taxes may look very different next Thursday morning,’ Hopper says.

‘For many, this means re-running their numbers and more cautious budgeting. People will always need to move, and there is only so long the market can stay in suspended animation.’

As ever, uncertainty drives people in different directions. A report in The Times suggested there has been a last-minute flurry of activity as sellers attempt to get sales over the line before 26 November. Let's hope that all those conveyancers and solicitors burning the midnight oil haven't been working in vain.