All Bark And No Bite

In the Financial Times, analysts had warned that the Treasury was looking at “a Budget tax raid on owners of expensive homes,” with suggestions that changes to council tax bands could become much broader. Meanwhile, The Telegraph cautioned that rumours of new levies were already chilling activity ahead of Budget Day, while The Times reported that uncertainty around a potential mansion tax had left parts of the market “marking time” through October and early November.

We had exchanged contracts over the summer on a significant Notting Hill transaction for some lovely clients, with completion scheduled for the very end of October. As Budget rumours began circulating, we immediately sought advice on how our clients’ tax position might change if completion could be pushed until after the Autumn Statement. Having already exchanged, completing post-Budget would effectively have given them a choice between the old and new regimes - whichever proved more favourable.

The concern was the rumour that SDLT might be replaced by a substantial annual levy. Having already paid over £2 million in stamp duty on completion, the prospect of then facing a rumoured 1% annual charge on the property’s value would feel particularly galling.

We explored whether the vendor might agree to delaying completion, but with talk of possible seller taxes and even capital gains on principal residences beginning to circulate, it was hard to see why they would. In the end, we concluded it was futile - and like everyone else, our clients were left on tenterhooks until Budget Day. When 26 November finally arrived, what landed felt far more like tax tinkering than transformation and came as a considerable relief.

In the end, the autumn fiscal package announced a High Value Council Tax Surcharge on properties valued over £2 million, with new higher value bands scheduled from 2028. The highest surcharge is an additional £7,500 council tax on properties worth more than £5,000,000. And crucially, no overhaul of Stamp Duty and no sweeping wealth tax. For owners in Prime Central London, that distinction matters. Talk of punitive annual levies had dominated the autumn chatter, but what emerged was a delayed and relatively modest charge, not a fundamental redesign of property taxation.

There were also some tweaks to property-linked taxes, including planned rises in property income taxation for landlords from 2027, part of a broader effort to raise revenue without touching headline income tax rates. Again, whilst private landlords continue to be under siege, and to the detriment of tenants who will only pay higher rents as landlords continue to exit the market, this felt evolutionary rather than disruptive, and nowhere near the wholesale changes some had feared.

What’s been most striking is how much sentiment was shaped by speculation rather than policy. In the run-up to the Budget, we heard through estate agents of buyers who paused viewings not because of specific measures, but because the narrative made the future feel uncertain. One US client of ours, who is selling before our search begins, described the market as “frozen by hearsay,” with buyers hesitating simply because everyone expected change.

As Christmas approachs, activity has started to return. Several estate agents have told us their inboxes filled with new enquiries once the Budget dust settled, not because the measures were especially favourable, but because they were far less severe than anticipated.

There’s also been a noticeable reshuffling of international demand. As some non-doms and younger entrepreneurs explore alternatives in Europe and the Middle East, we’re seeing renewed interest from US buyers, particularly those seeking political stability and a foothold in Europe; many of whom are unfazed by UK tax headlines given they’re taxed globally anyway. With the Budget landing just as the market naturally goes into hibernation for Christmas, it’s too early to judge how active overseas and domestic buyers will be in the New Year. That said, if our current conversations are anything to go by, 2026 may prove more resilient than recent commentary suggests. Markets adapt, priorities shift, and life, as ever, carries on.

Of course, the broader context still matters. London pricing trends over the last decade reflect real-terms adjustments and persistent affordability pressures. But the 2025 Autumn Statement appears less a watershed moment than a recalibration, leaving Prime Central London fundamentally intact.

In that sense, this Budget will ultimately be remembered less for the taxes it introduced and more for the stories told around it, if not forgotten entirely. And as we look ahead to 2026, it serves as a reminder that in property, as in life, psychology of these events often outweighs policy.

If you’d like to discuss how today’s market conditions affect your own plans in Prime Central London, we’d be pleased to hear from you and look forward to seeing if we can help with your move in 2026.

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• Author Alex Woodleigh-Smith
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