London Property Market After the Budget

The Autumn Budget is behind us and, as we head towards Christmas, the London property market has a little more clarity about what comes next.

Some of the announcements will not take effect for months or even years, but they are already shaping conversations around buying, selling and letting. At the same time, our own D&G data shows that serious buyers are still moving, tenant demand remains strong and there are reasons to look ahead with confidence.

So, whether you’re thinking about a move in the New Year, getting onto the property ladder or reviewing a rental property, here are the changes worth knowing about, what we’re seeing across the market now and what they could mean for your plans..

A new surcharge for higher-value homes

From April 2028, owners of residential properties in England worth £2 million or more will face the new High Value Council Tax Surcharge, payable alongside existing Council Tax.

The annual charges will be:

£2m to £2.5m: £2,500
£2.5m to £3.5m: £3,500
£3.5m to £5m: £5,000
£5m+: £7,500

For London homeowners and buyers at the higher end of the market, the confirmed bands provide greater clarity when planning ahead.

The Valuation Office will carry out a targeted valuation exercise to identify properties that fall within the new bands, with the first charges taking effect from April 2028.

More support for first-time buyers

The Budget also confirmed the new Your First Home scheme, designed to reduce the upfront barrier for eligible first-time buyers purchasing participating new-build homes.

Under the scheme, buyers will be able to purchase with:

a minimum 2.5% deposit
a 20% government equity loan
an equity loan that is interest-free for the first 5 years
a London household income cap of £140,000
property price caps of £650,000 in inner London and £500,000 in outer London

Applications are expected to open from February 2027, with the first loans available from April.

For buyers who have found building a large deposit one of the biggest obstacles to getting onto the property ladder, the scheme could make home ownership more achievable.

Changes to first-time buyer savings

There were also changes to the way first-time buyers can save towards a deposit.

From April 2029, the government will introduce a new First Time Buyer ISA for new savers. It will allow contributions of up to £4,000 a year, with a 25% government bonus available towards a qualifying first home worth up to £450,000.

Unlike the Lifetime ISA, the new product will have no upper age restriction.

For existing Lifetime ISA holders, the withdrawal charge has also been reduced from 25% to 20% where the funds are used to purchase a qualifying first home above the £450,000 property price cap. The change took effect from 29 October 2026.

London buyers are still moving

While Budget speculation created a degree of uncertainty, our own figures suggest serious buyers have remained active.

Our D&G data showed that well into October, viewings had already surpassed the whole of September, while sales agreed were around 6% ahead of the previous month.

That underlines an important point. Market conditions may change, but buyers who are motivated and well prepared continue to move when the right property comes along.

For sellers, having the right strategy and an experienced agent remains crucial. With D&G Partners bringing an average of 17 years of property experience, we combine local market knowledge with a considered pricing and launch strategy to put properties in the strongest possible position.

What the Budget means for landlords

One of the most significant changes for landlords is the increase in property income tax rates.

From 6 April 2027, the rates applying to property income will rise by 2 percentage points to:

24% basic rate
44% higher rate
49% additional rate

For landlords receiving rental income personally, this will mean a higher tax charge.

However, tax is only one part of the picture.

Our latest D&G data shows that applicant levels are around 13% higher than at the comparable point last year, while available rental stock is around 27% lower.

With more tenants competing for fewer available homes, demand remains strong and rental values continue to be well supported.

For landlords reviewing their position, understanding both the tax implications and what their property could achieve in the current rental market is important before making any decisions.

Douglas & Gordon CEO James Evans has also shared his thoughts with the Financial Times on the property income tax changes and what they could mean for landlords and the wider rental market.

Greater clarity heading into the New Year

The Budget does not remove every question facing the property market, but it does provide greater clarity around several of the issues buyers, sellers and landlords have been considering.

For those thinking about a move, reviewing an investment or planning for the year ahead, understanding how these changes apply to your own circumstances is the most useful place to start.

If you would like to understand what your property could achieve in the current market, speak to your local Douglas & Gordon Partner or request an updated valuation.