What does the mini budget mean for property?

Mini Budget: our experts’ analysis from a property perspective and their calls to action.

Our experts have been monitoring energy support packages, interest rates and of course today’s mini budget to bring you a summary of what is being put in place and how this impacts property.

On 23 September 2022 the Chancellor announced the following:

  • Stamp Duty: scrapped on first £250,000 and for first time buyers under £425,000. The value of the property on which first time buyers can claim relief also increases from £500,000 to £625,000
  • Income tax: 45p top rate of income tax scrapped. Basic tax rate also decreases from 20p to 19p
  • Corporation Tax and National Insurance: reversal of planned rise from 19% to 25% in April 2023, aimed at encouraging investment in the UK alongside the removal of the cap on bankers’ bonuses and the national insurance increase of 1.25% also reversed
  • Investment Zones: 38 potential new investment zones identified which may benefit from low regulation, low tax, business rates relief and more flexible planning
  • Business Rates: No structural change but businesses in Investment Zones stand to benefit from 100% relief on newly occupied business premises, while certain existing businesses will also receive this if they expand in English Investment Zone tax sites
  • Planning: Promise to make planning simpler and quicker to bring forward infrastructure projects in particular, in a ‘liberalisation shake up’ of the planning system with details yet to be announced
  • Energy: Measures to cap household and business bills will cost £60 billion over the next six months but will help people for two years while the Govt seeks to negotiate energy contracts in the long-term
  • Affordable Housing: No specific commitment to Affordable Housing
  • VAT: scrapped for overseas visitors to the UK to encourage spending
  • Connectivity and Infrastructure: Mentioned in passing only as part of a comment on more to come on ‘Levelling Up’ which may or may not be replaced by ‘Trickling Down’ but should have new commitments within, we wait to hear

On stamp duty James Hyman, head of residential at Cluttons, comments:

“The changes to stamp duty the Chancellor has made today are of course positive for first-time buyers most importantly to counterbalance the increase in interest rates made yesterday. However, the increase in the stamp duty threshold to £250,000 will have minimal effect given it is well below the UK’s average house price.”

“It is disappointing that the chancellor has done nothing to encourage private landlords back to the market. What would really help the UK’s current housing crisis is a reduction of the 3% levy on second home purchases and reintroduction of tax relief for landlords especially on improvements to their properties. The main reason why rents have escalated so quickly over the last two years has been lack of supply, which has been driven by so many landlords being forced to exit the market due to the government no longer making it viable to be a private landlord.”

On business rates, Ryan Jones and Michael Hampton-Riddington, partners in business rates at Cluttons, say:

“The announcement of new ‘Investment Zones’ providing 100% relief from business rates on newly occupied business premises, and certain existing businesses where they expand in English Investment Zone tax sites will be welcomed to encourage growth however this will not provide already struggling businesses any immediate relief.

Over the past three years, businesses have faced many challenges from Brexit to Covid, the acceleration of online retail and latterly the energy and talent crisis. Many have adapted and sought to be innovative to cope with these changes. Now is the time to help them flourish and enjoy a prolonged period of operation during a time when the British public are embracing physical retail and getting to grips with the return to the office. We believe smaller businesses should take priority, but we must also not forget the pension funds and public sector bodies that also own and occupy real estate and who have a duty to ensure finances are protected to support real people in the long term.

In the meantime, we continue to urge businesses to act now ahead of the next revaluation of 1 April 2023 by checking their rateable values now, before their opportunity is lost and well ahead of the 31 March 2023 deadline. This may provide backdated payments on the last six years for their properties that have potentially been overvalued. We are offering free rates audits to all businesses in order to help this get kickstarted.”

On planning, Silas Willoughby, associate in planning at Cluttons says:

“It is understandable that this week’s business and mini budget measures are, in the main, focussed on the cost of living and rising energy costs. We are expecting a longer-term announcement soon on Levelling Up or ‘Trickling Down’, a reinvigoration of the White Paper and a tweaked NPPF to build on the high level commitment today to making infrastructure easier and quicker to bring forward.

While offered at the central government level, tax incentives should be administered locally, which requires investors to understand local tax policies and interact across local government entities. This can prove a difficulty for smaller businesses, which often lack sufficient resources to be aware of the initiative, navigate the application process, and comply with the compliance and procedures. Therefore, the Government and administrators will need to facilitate these investments by supporting investors and other stakeholders.

Administrators should have a detailed understanding of each low-tax, low-regulation investment zone and they are more likely to tailor their resources to increase their attractiveness to investors—either by adapting their offer to investors or by making their own investments to make opportunities more attractive. Their knowledge of the needs of each community will enable them to develop a pipeline of initiatives that would have the most impact in each zone. These initiatives can include reviewing development growth in affordable housing projects, commercial and industrial real estate, projects in the feasibility stage, fast-growing businesses that need financial support or buildings, transport infrastructure projects, and other opportunities, which will stimulate community development and growth.

A reduction in the powers of the Planning Inspectorate in the short term have also been discussed. Given everything else going on, this would come at a strange time whereby both Local Authorities and central checks and balances need to be in place to ensure that developments are brought forward without political motivations and that they genuinely serve the needs of the communities they are proposed in. The balance of power needs to be right because in the same way a Planning Inspectorate can set precedents, local councils can in theory refuse a scheme based on political motivations or genuine uncertainty as to how a scheme is received locally. Either way, each Local Authority is different and there can be no one size fits all approach. I would like to see greater thought centrally given to more inclusive planning consultations, fast tracking of brownfield sites, flexible uses and affordable developments right now.”

On energy, Ian Paton, partner in building consultancy at Cluttons says:

“While energy support is welcome, this must be swiftly followed by longer-term fast-paced legislation that will increase the UK’s renewable programme and decrease our reliance on foreign imports which is ultimately the cause of the situation we are in currently. It’s not good enough to put much needed reforms to electricity, gas, and carbon finance into the Levelling Up Bill, which is already incredibly overweight. Scotland for example is largely self-sufficient and can utilise its renewable energy from hydro and vast offshore wind farms.

“I would like to see a real focus on grants, subsidies or a fund set up to support businesses to invest in energy infrastructure such as battery storage, solar PV and heat pumps, while some sort of planning fast track for green roofs which are an excellent source of cooling and retaining energy whilst increasing biodiversity would also be sensible, particularly as perhaps 30% of London viewed from above is rooftop. In addition, investment in water and blue green urban planning, EV infrastructure, upgrading affordable housing and making EPCs and building regulations more fit for purpose will also be sensible measures with real long-term rewards. Removing the ban so quickly on fracking was nonsensical and has increased concerns about the Government’s ability to deal with the energy crisis properly, rather than coming up with solid plans that will genuinely make a difference.”

Giles Sutcliffe, partner and head of affordable housing at Cluttons says:

“The energy crisis and general affordability has had a further impact on the ability to deliver social and affordable housing, which is already facing an uphill battle thanks to land values, construction costs and availability of labour. Housing Association budgets and tenants’ affordability for energy is seeing costs double and, in some areas, rising six-fold despite various caps and freezes promised or mooted. In addition, with inflation continuing to soar, future affordable housing rents and net income cannot lag behind because this will impact the real value of housing stock which make schemes more financially unviable and creates a further lack of affordable homes in the pipeline. While it’s important to be sustainable and focus on renewables and greener energy in the long term, in the short term, we must also look at helping people in social housing access cheaper energy and that means supporting landlords to access cheaper forms of efficient procurement and possibly even removing the pressure of EPC targets while instead incentivising those that put in place robust plans to upgrade and retrofit energy efficient infrastructure by certain dates.”

Darren Zitren, partner at Cluttons in Manchester and head of network estate management says:

“We feel very strongly that Levelling Up and ‘Trickling Down’ is dependent on the UK’s connectivity because this fuels economic growth, investment from businesses, talent, jobs, and access to social benefits and healthcare amongst many other things, including access to energy infrastructure which is going to be ever more crucial going forward. Hence, we hope that the rollout of superfast broadband and 5G infrastructure gets a higher pegging on the list of Levelling Up priorities than the previous administration’s watering down of targets. We are mindful that the Government have focussed most attention on energy bills and the cost of living in this emergency business response and mini budget and, whilst this is understandable, the foot cannot be taken off the gas of measures that will accelerate growth and support economic recovery to the whole of the UK in the months and years ahead.”

Commenting on interest rates, Jonathan Rhodes, partner in valuation at Cluttons said:

“The Impact of rising interest rates is already being felt especially across the commercial property sectors where values are falling.

Increased borrowing costs are putting a squeeze on LTVs, but banks are also having to consider their margins and we are beginning to see these getting squeezed too.

With rising interest rates, bond yields have also been increasing. This is reducing the gap between 10 year bond yields and property yields, which is also contributing towards the softening of yields.

The big question is how high interest rates will go – some people are suggesting 4% by the end of next year – five year swap rates were (a few days ago) at 3.60% so the market is already expecting and pricing in ongoing higher rates.”

Get in touch with any of our experts below for more information and to understand how these measures could impact your business.


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James Hyman

Partner, head of residential agency

Head office

T +44 (0) 20 7407 3669
James Hyman, head of residential agency, Cluttons

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Michael Hampton-Riddington

Partner, head of rating south

Head office

T +44 (0) 20 7408 1010
Mike Hampton-Riddington

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Ian Paton

Partner, building surveying


T +44 (0) 1865 812 755
Ian Paton

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Darren Zitren

Partner, head of infrastructure


T +44 (0) 20 7647 7041
Darren Zitren, head of infrastructure, Cluttons

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Jonathan Rhodes

Partner, commercial valuations

Head office

T +44 (0) 20 7647 7246
Headshot of Jonathan Rhodes, national head of valuations, Cluttons

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Ryan Jones

Partner, head of rating north


T +44 (0) 161 521 5570