The Stamp Duty surprise, inheritance tax on farms and more: A breakdown of the Autumn Budget

So now we know. After months of feverish speculation about what Labour had up its sleeve, Chancellor Rachel Reeves took to the stage this week to reveal a cool £40bn in tax rises.

Events like the Autumn Budget are always a spectacle and this one, delivered by Britain’s first female Chancellor, was no different.

There were political quips (of course) and reasons to cheer (Reeves pledged to take ‘a penny off a pint in the pub’) in a packed House of Commons.

But putting all that to one side, what does the Autumn Budget mean for the housing market?

The surprise Stamp Duty hike on second homes, or how the Chancellor 'has given with one hand and taken away with another'

In the end, the widely-speculated capital gains tax (CGT) hike on second homes didn’t materalise.

But the key announcement for the housing market was one that hadn’t been trailed beforehand: a surprise 2% increase in the stamp duty surcharge on second homes. What's more, it kicked in overnight, prompting a madcap afternoon of buyers, agents and solicitors rushing to exchange contracts on as many deals as possible before the end of business.

So while landlords may be relieved that they won’t pay more tax when they sell up (as they had probably expected), they will when they come to buy an additional home. Becky Fatemi, executive partner at Sotheby’s International Realty UK, said: ‘It feels like the Chancellor has given with one hand and taken away with another when it comes to second homes.’

That said, Guy Robinson — head of residential at Strutt & Parker — played down the higher stamp duty surcharge, describing it as ‘while not insignificant, is a fairly modest adjustment.

‘The reality is that most buyers seeking a second home are unlikely to be deterred; they’re typically driven by the desire to secure a dream property and have the financial flexibility to absorb the added cost.’

Mark Harris, chief executive of mortgage broker SPF Private Clients, was also relatively sanguine about the change. ‘Most people are in it for the long term and continue to want to hold property for the long term – an additional entry cost is irritating and might put off new entrants to the market. But those already in it with established models will continue to invest as it is a market they understand and know,’ he said.

'A whack with a hammer'

Over at Savills, Lucian Cook, head of residential research, also expects new investors to be ‘very thin on the ground', and that 'even existing larger, wealthier, landlords, will think very carefully about whether they continue investing. That means there will be a thinner seam of demand and fewer options for those looking to exit the sector.’

Peter Stimson, head of product at MPowered Mortgages, saw things in even more extreme terms, arguing that landlords and second homeowners got ‘a whack with a hammer’.

‘A sector rendered fragile by successive tax raises and interest rate rises is now likely to be clinging on by its fingernails after today's announcement,’ Stimson explained.

‘Fewer than one in 10 mortgage applications made this year were for a buy-to-let loan, less than half of what it was just a few years ago. That share is now likely to plunge further as would-be landlords run the numbers and decide they just don’t stack up.’

Several market commentators pointed out that the stamp duty increase is likely to crank up the pressure on renters as well as landlords.

Knight Frank’s head of UK residential research, Tom Bill, warned: ‘The rise to 5% may reduce the supply of rental property further and push up rents, which would ultimately cause more financial pain for tenants. Together with the Renter’s Rights Bill, there may be unintended consequences for the UK private rental sector.’

Inheritance tax shake-up

In the words of the NFU, the Autumn Budget was ‘a blow to British farmers’, with Reeves unveiling Agricultural Property Relief and Business Property Relief reform.

From April 2026, the first £1m of combined business and agricultural assets will continue to be inheritance tax-free. But for assets worth more than £1m, inheritance tax will kick in with 50% relief (at an effective rate of 20%). The reform came alongside other inheritance tax announcements.

Jamie Freeman, director at Haringtons UK, described the changes as a ‘setback for multi-generational farmers and landowners’.

He said: ‘I would imagine the current generation of farmers will have their succession plans in place and therefore it will be the next generation who might be those feeling the squeeze from the new changes.’

It’s a point that TV presenter Kirstie Allsopp tackled furiously on X (formerly known as Twitter): ‘Rachel Reeves had f***ed all farmers, she has destroyed their ability to pass farms on to their children, and broken the future of all our great estates, it is an appalling decisions which shows the government has ZERO understanding of the what matters to rural voters.’ Celebrity TV farmer Jeremy Clarkson made a similar comment, saying that farmers had been 'shafted' in the Budget.

Those on the other side of the debate argue that the new rules could affect far fewer farmers than initially reported, and furthermore — as the CLA themselves point out — the changes are subject to a consultation period next year, and would not come in to effect until April 2026 at the earliest. There is plenty of time to see how things shake out, and further back and forth is a given.

That 'consultation' has effectively started already, since protests are already in the works. The NFU is organising a rally in London on November 19 and the CLA has launched a campaign ' to defend family farms and rural businesses following the Chancellor’s autumn budget.' The CLA posted a draft letter for people to send to their MPs which says that 'changes to Agricultural Property Relief and Business Property Relief will pull some 70,000 farm businesses across the UK, and many other multigenerational businesses, into paying inheritance tax.'

Non-doms: Not so much a crackdown as a vanishing trick

Also in the mix was Labour’s plan to scrap the existing non-dom tax regime, replacing it with a new residence-based system from April 2025. Like some other Autumn Budget announcements, it's not new news but underlines the government’s commitment to the proposal.

This measure, combined with the stamp duty surcharge on second homes, is prompting many ultra high net worths (UHNW) to consider relocating, warned Fatemi. ‘Those who once called London home are now taking their personal and business investments elsewhere and this budget will do little to make them reconsider leaving’.

New homes investment

There were also big numbers mentioned when it comes to building lots of shiny, new homes. In case you need reminding, Labour wants to build 1.5 million homes over the course of this parliament.

Clarity 'finally'

Knight Frank's Bill had previously spoken of the ‘information vacuum ahead of the Budget’. And Geoff Wilford, founder of Wilfords London, summed up the mood of many when he said that ‘it’s a relief to finally have clarity from the Chancellor’s budget’.

‘The market has been stuck in a state of limbo, with both buyers and vendors anxiously awaiting the news. Now that we have a clear direction, we can expect those who postponed decisions to start moving again.’

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