How the Budget could affect property

We do caveat that ahead of the formal Budget announcement there is plenty of speculation and nothing is set in stone. Coutts does not provide tax advice and the below should not be taken as such. We recommend you contact an independent tax adviser to discuss your personal tax situation.

Below we assess potential tax changes and how they might impact the market. First though it’s worth remembering the following, whatever your property situation.

• Acting drastically is rarely the most prudent move, especially if this involves your main residence and home.
• Nothing is yet certain so don’t rush through transactions in anticipation of changes in tax.
• Given lack of capital appreciation over the last ten years in prime central London, the potential for capital gains tax (CGT) liability on recent purchases in this market might not be significant.
• A strong buyers’ market remains with good negotiating conditions and there is increased choice in the market currently too.
• London’s global appeal remains resilient. London is seen as a global financial and cultural hub and so continues to attract high-net-worth individuals. The capital also offers access to world-class amenities such as parks, museums, high-end boutiques, a relatively safe place for families and access to prestigious educational institutions. Globally, London’s unique blend remains unparalleled. The established legal system (rule of law), time zone, connectivity and language continue to make the city compelling for international businesses.
• While potential tax reforms could lead to some short-term volatility, the intrinsic value of London real estate is likely to sustain buyer interest in the medium to long term.
• Coutts is here to help you with any property queries. Our Property Finders’ Service could be more relevant than ever in helping you navigate complexity and opportunity in the market.
• And, if you do wish to move fast in the property market, we could help finance your goals.

For homeowners, investors, renters, landlords and those looking to buy or sell on the property market, there’s plenty to consider ahead of the Budget on 26 November. With the clear recognition that much is speculation and if changes are announced, they may take months or years to become law through the parliamentary process, we can look at some of the potential proposals that are making headlines.

Replacing Stamp Duty

This might involve replacing the current sliding system of buyer paid tax with a property sales tax, paid by the seller, which could apply to properties over a certain threshold. This could mean fewer transactions would be taxed overall but properties at the higher value end would face a higher levy. There is also the potential for replacing stamp duty land tax (SDLT) with an annual property tax, paid on properties over a certain value.

Ending the relief for selling your main residence

CGT is payable on the sale of property, but there is a relief for those who sell their main residence. There is a suggestion that main residences should be charged to CGT, though this might be restricted to higher value sales. This may well discourage those who have owned their houses for a long time from selling them. However, it would be less likely to affect people who have bought more recently and whose properties have not appreciated significantly in value.

Changes to prevent mixed use of property relief

This could involve abolishing or tightening reliefs that allow certain properties to access lower tax rates by being classified in part or in whole as commercial property.

Targeted relief for first time buyers and downsizers

This could provide tax relief in order to free up housing and allow more movement in the property market, helping first time buyers get on the ladder and further enabling downsizing.

Council tax reforms

This might involve updating valuations to modern property prices or changing the basis of the liability. If this does come to pass, it could mean more aggressive rates and/or surcharges for second homes and short term lets. It would probably take some time to implement any changes to council tax.

Understandably, there is some caution in the market as people wait to see what is in the Chancellor’s red box. Generally, we are seeing weak performance in holiday homes and likewise a large withdrawal of landlords from the buy-to-let space. However, this has led to a re-entering of sophisticated investors looking to take advantage of discounted pricing.

The mainstream markets are stable but activity is subdued. Broadly, the North of the UK, including Scotland and Northern Ireland, is outperforming the South. The Northeast leads with 7.8% growth, while London lags at 0.8% (source: HM Land Registry).

Prime and super prime markets

Prime country market

Prices have softened since the covid boom and though transactions are down this is not as drastic as the media suggests. Best-in-class properties continue to attract buyers, which are often sold privately – the Cotswolds being a notable example.

London prime market overview and trends

Transaction volumes are down of 12.5% compared to last year. The November Autumn Statement is impacting activity and it’s expected that volumes will be low for the remainder of the year. Discretionary buyers and sellers are pausing activity whereas needs-based and international buyers are proceeding, though more aggressively negotiating (Source Coutts/LonRes).

In Q3 2025, prime London property prices fell by 6.6%, meaning prices are down 2.3% compared to this time last year and 10.5% below their peak. Prime central locations, continue to trade at a significant discount to market highs with prices in South

• Kensington 23.7% below their peak and prices in Knightsbridge & Belgravia 22.1% below their peak (Source Coutts/LonRes).
• Mayfair & St James's, are witnessing the largest average discounts at 20%, followed by South Kensington at 15.1% (Source Coutts/LonRes).
• We’ve seen a buyer profile shift as younger, tech-driven domestic buyers are stepping in – 46% of buyers are now under 40 (Source: Savills Research, Prime Central London, UK Residential – Autumn 2025).
• Investors are retreating as the buying as investment share of demand has dropped from 13% to 9% (Source: Savills).

Lettings market dynamics

• Gross yields for prime central London rose to 3.4% in June 2025 (from 2.9% in March 2020).
• Rents are outperform sales, rising 7.7% since June 2022; while prices dropped 5.5%.
• The Renters’ Rights Bill introduced new rules but it has exempted properties with £100,000+ annual rents. 

(Source: Savills)

Price and rental movements in prime central London

• Biggest price drops since 2014 peak: Earl’s Court (-29%), South Kensington (-26%), Mayfair (-25%).
• Strongest rental growth (5-year): Belgravia (+26.8%), Marylebone (+25.5%), Knightsbridge (+20.4%).

(Source: Savills)

Ultra-high-net-worth individuals

• Tax concerns have prompted some high-end property owners to become non-UK residents, however 67% of clients advised by Savills that left the UK have retained their London property.
• 42% of clients advised by Savills shifted from buying to renting, citing high transaction costs.

(Source: Savills)

Super Prime Market

• Super prime sales (£10m+) are down 22% compared to the 10-year average.
• Super prime activity in the last quarter was centred around Notting Hill & Holland Park, Chelsea and South Kensington.
• Average price per square foot on super prime sales across prime London (excluding new built developments) is £2,759. This is 14.1% below the peak.
• Super prime buyers are also negotiating 12.4% on average off the asking price.

(Source: Coutts/LonRes).

Reasons for optimism

• Price drops have created a buyers’ market, supporting strong negotiating conditions. There is also more supply in the market. 79% of last quarter’s sales were sold at a discount to asking price (source: Coutts/LonRes).
• Life events, not fiscal policy, continues to be the key driver for many transactions.
• London’s global appeal remains resilient. North American buyers in particular remain active and see London as particularly attractive for a home. Likewise, we do continue to see demand from clients based in the Middle East.

Market Supply

The supply of stock available for sale on the open market continues to play to a buyers market. Although new listings have come down 10% compared to the previous quarter, they are still up 9% year on year and 25% compared the 10-year average. There is 14% more property available for sale on the open market compared to last year. This increased supply further strengthens the buyer’s upper hand in this market (source: Coutts/LonRes).

Clear value for buying services

As a result of this, buying agents are more relevant than ever in navigating complexity, sourcing best-in-class properties – which often are not available on the open market – and advising on prices when there is a material gap between buyers’ and sellers’ expectations on price. Coutts is especially well place to help with our Property Finders Service, potentially providing you with access to leading buying agents with the relevant knowledge and experience in the markets you are looking in. Coutts Property Finders Service

Points of consideration ahead of the budget

If you’re already considering selling, it’s worth noting that owners of second homes or landlords could pre-empt potential tax rises by selling earlier. If a rise in CGT is imposed, then primary property owners could also look to sell early.

For those looking to buy now and take advantage of current market conditions (strong negotiating conditions, increased supply and weakness in pricing), Coutts could help via our Property Finders Service, please speak to your private banker to find out more.