A Summary of the Government’s Autumn Budget 2025 and Takeaways for the Property Sector

Planning and Skills

In her speech Reeves celebrated the impact of planning reforms, citing Labour’s “overhaul” of the planning system as proof that this government is an agent of change. The OBR is predicting that, whilst the number of new homes being built will fall from 260,000 a year in the early 2020s to 215,000 in 2026-27,  it will then increase to an average of 305,000 being delivered in 2029-2030.

Indeed, a promise to boost planning capacity was one of the main takeaways for the sector from the Budget. £48m will be invested to recruit 350 planners, accomplished in part by expanding the Pathways to Planning Graduate Scheme and creating a new Planning Careers Hub alongside the announcement that £725m will be allocated to the Growth and Skills Levy to support and fully fund apprenticeships for those under 25 years of age.

The Government claims that, by doing this, in conjunction with funding improvements for environmental regulators, the number of recruits for the planning system will increase to 1,400 by the end of this Parliament.

‘Mansion Tax’

Despite weeks of speculation and headlines before the Budget, the Chancellor’s speech contained no changes to Stamp Duty and no announcement on Local Housing Allowance rates , which remain frozen. However, Rachel Reeves, has pushed ahead instead with plans for a so- called ‘mansion tax’ on properties which are worth over £2 million,  as well as a 2 percent increase to income tax payable on receipts from property.

Starting in 2028, Reeves will introduce a high-value council tax surcharge in England. This will put an additional £2,500 charge on properties worth more than £2m, and £7,000 for those worth more than £5m. She has said that this will raise £400m by 2031 and only impact the top 1% of properties.

However, critics have advised that the ‘mansion tax’ will disproportionally hit homeowners in London and the South East, which already has a reputation for being the most troubled part of the property market. Furthermore, there are concerns that by placing further financial pressures on landlords, by increasing the rates of income tax payable on receipts from property will simply serve to increase rents as costs are passed on to tenants. 

Devolution

Following on from the announcement that £1.3bn in the National Housing Delivery Fund and £7bn from the new Affordable Homes Programme will be allocated towards devolved authorities in Greater Manchester, Liverpool City Region, North East, South Yorkshire, West Yorkshire and the West Midlands. Reeves has announced a further £13bn in flex funding for mayors to invest in skills, business support, and infrastructure.

According to the Spending Review 2025 (SR25) document, this £13bn will be distributed via integrated settlements from 2026-27 to 2029-30 for the mayoral strategic authorities of Greater Manchester, West Midlands, Liverpool City Region, West Yorkshire, North East, South Yorkshire and the Greater London Authority.

The funding model, which funnels various government grants into a single pot, aims to empower regional leaders with control over public services priorities, aligned with their local growth plans. This could include investment in transport and housing and it is hoped that empowering mayoral authorities with greater autonomy and additional funding will help to accelerate housing delivery and provide a major boost to regional economies.

The Government has said it will consider rolling out additional integrated settlements to more authorities at the next spending review, further cementing the Government’s commitment to devolution and encouraging the formation of more combined and devolved authorities.

Tim Heatley, co-founder of Capital  & Centric was enthusiastic in his praise of this announcement stating  “This is a budget that puts real money behind regeneration. For too long Britain’s towns, cities, and regions have had to come begging to Whitehall every time they wanted to get something done. Devolving more power and funding to mayoral city regions feels like a proper attempt to put decisions in the hands of local leaders. What matters now is ensuring the money is spent in the places where it’ll have the most impact.”

Warm Homes boost

In addition to the £13.2bn promised in the Spending Review for the Warm Hames Plan, the Government will also invest an further £1.5bn into the scheme which helps homeowners improve the energy efficiency of their property.

So what was missing from the Budget?

Social Rent Convergence

Whilst not in the Autumn Budget documents, the Government has confirmed it remains committed to re-introducing social housing rent convergence, which would allow cheaper social housing rents to rise more quickly to ensure alignment between similar properties, it has advised it wants to take time to get the policy right and promised that a decision about how this will be implemented will be made in January.

Opinions have differed across the social housing sector on the amount over and above CPI-plus-1% social landlords should be permitted to increase rents on properties that are below formula rent. The Government’s consultation paper asked for views on whether weekly rents should be able to increase by a cash limit of £1 or £2 a year.

The Government has said it will respond to the consultation “in full” and a decision will  be announced before the launch of the £39bn Social and Affordable Homes Programme.

New Towns

Despite the House of Lords’ recommendation to include the new towns in the Budget, the most it got in terms of a financing programme was: “The Government will continue to consider the ways in which private finance can support the delivery of wider infrastructure ambitions, including leveraging private finance to help deliver the next generation of new towns.”

Support for First-Time Buyers

It was noted that missing from the Budget was meaningful support for first-time buyers with a lack of new incentives to try to stimulate demand, drive new housing supply and, in turn, lead to more genuinely affordable homes.

With the Government’s ongoing target to build 1.5 million homes, and given their recent focus on home buying and selling, this lack of support has come as a surprise and with an average deposit for first-time buyers currently sitting around £60,000, this has been dubbed as a missed opportunity to support renters, home buyers and sellers and promote greater economic activity through the housing market.

Northern Powerhouse Rail

Those hoping for a surprise commitment for Northern Powerhouse Rail were left disappointed, whilst Reeves said she was supportive of the idea in her Budget speech the rail link is nowhere to be found in the Budget document itself.