Autumn Budget 2026: What it means for property & infrastructure

One hundred days after becoming Prime Minister, Andy Burnham sat next to his Chancellor John Healey in Parliament as Mr Healey delivered his first Budget.  

The Budget is titled “Breathing Space for Today, Fresh Hope for the Future”, but for the majority of the property market this title could well have been “Steady as she goes”. There were no real surprises, and for most investors and operators, this is good news. However, there were some exceptions. Individual buy-to-let landlords received scant breathing space from the Chancellor, who announced a bigger hike in income tax from property starting next year. This new higher rate of tax is set to raise around £1 billion a year. On the other hand, the detail on the new £4.7 billion Equity Loan scheme for first-time buyers of new homes was welcomed as a much-needed fillip for the housebuilding sector.  

The economic backdrop over the next 12 months will also create more challenging conditions for the whole of UK plc, with the Office for Budget Responsibility (OBR) revising down its forecast for economic growth next year from 1.5% to 1%, while inflation is expected to rise. David Miles, from the OBR, said the outlook for household disposable income in the UK “was a pretty grim picture”. 

Even so, one of the key tasks for the Chancellor was not to ‘spook’ the markets, and he achieved this, with the 10-year gilt yield largely unchanged at the end of the day.  

Property Taxes

Income tax on property income

There was a surprise 2% additional rise in income tax on income from rental property which the Exchequer hopes will raise more than £1 billion in 2028/29, and nearly £900 million in each of the following two years.  

Last year Chancellor Rachel Reeves announced she was increasing income tax on rental income by 2% on every income tax band, but today Chancellor John Healey added another 2% onto that rate. This means those in the additional rate tax bracket will face nearly 50% income tax on property income 

Income tax on property: 

Income Tax band	Current rate, 2026/27	Announced at Budget 2025 for April 2027	Announced at Budget 2026 for April 2027
Basic rate	20%	22%	24%
Higher rate	40%	42%	44%
Additional rate	45%	47%	49%

This will pile more pressure on landlords who are already exiting the market amid changing regulations with the introduction of the Renters’ Rights Act and upcoming requirements to meet higher EPC standards. More than half of the 5 million rental properties across the UK are owned by smaller landlords, who own between one and four properties.  

Chris Morris, Head of Residential Lettings at Cluttons, says: “The additional tax increase on property income announced today will further exacerbate the strain on individual landlords’ finances and tip the balance towards selling for many. Across our offices, a significant proportion of the properties we are advertising for sale are from private landlords exiting the sector, and our clients have been telling us for some time that the financial case for holding on to their properties is becoming increasingly difficult to justify. As landlords leave the sector, the supply of rental homes is falling. Since demand remains steady, this is putting upward pressure on rents. The change is also likely to hasten the ongoing reconfiguration of the market away from smaller private landlords and towards larger corporate and institutional investors.” 

Higher Value Council Tax Surcharge (HVCTS)

There was also some further update on the Higher Value Council Tax Surcharge (HVCTS), the annual charge which will be introduced on homes worth more than £2 million from April 2028. There will be a deferral scheme on the payment for households with an annual income of £35,000 or less, or with less than £16,000 in savings, or where a member of the household meets disability criteria. ‘A fair rate of interest’ will be applied to the deferred payment, which will become due when the property is sold. Care homes, registered social housing and working farmhouses will be included in the properties that will be exempt from the charge.  

There will be a 100% surcharge for homes which are left unfurnished and unoccupied for a period of 12 months or more.  

Property value	Annual surcharge
£2.0m – £2.5m	£2,500
£2.5m – £3.5m	£3,500
£3.5m – £5.0m	£5,000
£5.0m+	£7,500

Laura Dam Villena, Head of Residential Agency at Cluttons, says: “Homeowners have had a year to allow the news to sink in on an annual charge being introduced on properties worth more than £2 million from April 2028, and there will be a sigh of relief from many that the threshold was not lowered in this year’s Autumn Budget. However, the announcement on the doubling of the annual charge for unfurnished properties, or properties vacant for 12 months or more may be a reason for second-home owners to sell, which would result in more properties entering what is already a well-stocked market, giving buyers more choice and ultimately putting further downward pressure on house prices.”   

Business Rates

It was well-flagged that Business Rates would be a big focus for the Chancellor today. 

Gareth Buckley, Head of Rating at Cluttons, says:  “The measures are not entirely unexpected and less radical than might have been the case. The decision to bring more properties into the Small Business Rate Relief Scheme will obviously be a benefit to small qualifying ratepayers but that will come at the expense of continued surcharges being levied on large occupiers.  The Government believes that the raising of the threshold above which rates become payable for small retail, hospitality and leisure businesses will cut business rates to £0 for 70,000 businesses as a consequence.”

Key announcements

• Small Business Rate Relief: For qualifying RHL properties, the threshold for 100% relief rises from RV £12,000 to £18,000, with tapered relief up to £21,000. The thresholds will be reviewed at the 2029 revaluation. The Government says this cuts bills to £0 for around 70,000 businesses. This was the headline measure.
• Retail, Hospitality & Leisure (RHL) bill cap: Increases in bills for qualifying RHL properties will be capped at CPI in 2027/28 and 2028/29. The cap does not cover RV increases from improvements, or the loss of other reliefs (such as Improvement or Hardship Relief) after 1 April 2026.
• Pubs, clubs and live music: Relief rises from 15% to 35% from 1 April 2027. Venues with an RV of £1m or more are excluded and keep the existing 15% relief in 2026/27.
• 1p transitional relief supplement: The surcharge on properties with an RV over £500,000 is extended for two years from 1 April 2027.
• Appeals: Valuation Tribunal England fees for non-domestic appeals will be abolished for the 2026 List and future Lists.
• Avoidance: There was no specific crackdown on empty rates, but a general anti-avoidance rule will follow a consultation. Local authorities will be reimbursed for external legal costs in unsuccessful cases that test a point of law on avoidance.
• Investment: The Government is publishing the findings from the business rates and investment call for evidence summarising views on how business rates affect investment in England and setting out the Government’s response.

Multipliers

	2026/27	2027/28
Standard	48.0p	49.7p
Small	43.2p	44.7p
RHL Standard	43.0p	44.7p
RHL Small	38.2p	39.7p
High Value	50.8p	52.5p
TR Supplement	1p	1p

• High Value: RV £500,000 and over
• Standard: RV £51,000 to £499,999
• Small: RV below £51,000
• RHL: occupied qualifying RHL properties

Supplements: Crossrail adds 2p for RVs above £92,000. City of London adds 3.2p for RVs above £51,000 and 2.9p below £51,000.

Housebuilding

Government sources said this week that there is a recognition among policymakers that the target to build 1.5 million homes in this Parliament is unachievable, and that ministers will refer to it less and less. This is not surprising given that data on housebuilding indicates that around 355,000 homes were completed in 2024 and 2025 combined, and further c.160,000 started this year – leaving the UK some way behind the roughly 300,000 a year that would be needed to achieve the 1.5 million target.  

Certainly, there was no mention of the target in the Budget.  

However, the Chancellor did make some announcements that will be welcomed by developers, not least some policy stability around building regulations (except where the changes will improve building safety). No change is a good move, as the regulatory landscape is an important part of getting homes built, and housebuilders of all sizes are already struggling with the complexity of the current system, and there may be some arguments that the Chancellor could have gone further to unravel this. However, the exemption for Biodiversity Net Gain requirements for residential developments on brownfield land of up to 1.5 hectares is another positive, if limited, move.  

The Chancellor also confirmed that the Government intends to bring in legislation to allow land to be zero-rated where it is sold to a registered provider of social housing.  

Your First Home – Equity Loan

The Government announced several weeks ago that it would launch a new equity loan scheme, essentially a new version of ‘Help to Buy’ which ran from 2013 to 2023, to address the ‘mortgage deposit gap’ facing buyers who struggle to save for the larger deposit required for the most competitive homeloans. The new scheme, called ‘Your First Home’ will offer a equity loan of up to 15% of the value of a new-build home for buyers with a deposit of 2.5% upwards.  

The key details shared in today’s Budget documents are the income thresholds for the scheme. Households with a total income of less than £110,000 a year buying outside London will have access to the equity loan, while the income cap for households in the capital is set at £140,000. The price caps for homes eligible for the scheme are £650,000 for inner London and £500,000 in outer London, while the caps across the rest of the UK will be set at ‘local authority median prices’. The scheme will open for registration by the end of December this year, with full applications from February next year and the first loans granted from April. The scheme is expected to support 70,000 homebuyers.  

Household energy payment – homes valued in Bands A-D (rental)

The Chancellor also announced a £100 energy payment for homes in council tax bands A to D, which will include homes valued at up to around £425,000 in some parts of the country.  

Infrastructure

Data centres

The Chancellor announced a ‘Data Centre Covenant’ during the Budget, saying “I want to ensure that the British people can benefit from the huge potential upsides.” 

Essentially the Government is proposing a new planning framework for the largest data centres of more than 100MW, potentially allowing these schemes to use the Nationally Significant Infrastructure Project regime. However, it also challenges developers to prove the case for development by demonstrating the benefits they will bring to local investment and communities, and how they will cover their share of energy costs, minimise water use, and benefit local homes and schools, hospitals and businesses by harnessing waste heat for their use.   

Energy

Mr Healey said that the Government will only procure clean power when it lowers bills overall and connects to the grid.  

This means that Government support for new clean power now depends on a project being able to connect to the grid, making a secured grid connection the main driver of value for solar, wind and battery land, and this will likely impact funding the attractiveness of sites for investors.  

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