Following the Chancellor’s Budget, experts at Fisher German – a leading property consultancy and Chamber member – give their reactions to the many ways Rachel Reeves’ announcement will affect their clients:
New Homes
Ella Pearson, Head of New Homes at Fisher German, said: “The increased investment in affordable homes promised by the Chancellor – significantly more than what was expected – is positive news for small to medium-sized new-build developers which typically have fewer affordable homes on site. The hope is that this will increase the appetite of housing providers as their risk is reduced.
“This will ultimately mean that more affordable homes will come onto the market, giving more people the chance to get on the property ladder.
“First-time buyers will also be pleased with the Government’s pledge to engage with the industry around the Mortgage Guarantee Scheme and making it permanently available to support loan-to-value lending of 95 per cent. If these plans are followed through, it should stimulate the market further.
“However, the increase in Capital Gains Tax on second homes will result in fewer buy-to-let transactions, resulting in a reduced appetite for holiday homes.”
Farming
Richard Gadd, Head of Farms Agency at Fisher German, said: “Whatever the Chancellor says, the decision to reduce agricultural and business property relief to 50 per cent for property above £1m will affect all but the smallest of farms.
“This announcement will have far-reaching consequences across the agricultural industry and as a result, we would expect to see more farms considering potential sales of farms or part of their holdings over the next few years along with potential restructuring options, at a time when British farmers really need to be supported.
“The age profile of agricultural property owners and their potential successors will of course impact decisions and restructuring options, but we do expect a significant amount of professional advice to be sought in the very near future.
“Importantly, there is sufficient time before the tax amendments come into force in April 2026 to really consider all options and secure that critical professional guidance.
“The move may well affect farmland values in time if supply does increase dramatically, but to what extent is to be seen. We expect a softening in demand from a proportion of buyers who are seeking land and agricultural holdings with inheritance tax reliefs in mind or where agricultural property relief is the principal driver.”
Residential
Alasdair Dunne, Head of Residential Agency at Fisher German, said: “There were no major surprises for the residential sector in the Budget.
“The increase in stamp duty for second homes will negatively affect the appetite of the buy-to-let market, but it the increase was not as steep as it might have been.
“And while Capital Gains Tax will increase on property in areas like the commercial sector, it will stay the same in the residential sector.
“The true drivers of the residential market are interest rates which are predicated on the BoE base rate. With the financial markets responding relatively well to the Budget, we will continue to see the planned base rate cuts, albeit they might be delivered a little slower than anticipated.”
Business Rates
Jonathan Young, Head of Business Rates Fisher German, said: “We were promised radical reform of business rates, but that is not apparent in the first Budget delivered by our new Labour government.
“Next year we will continue to see business rates relief for the Retail, Hospitality and Leisure sectors, with a relief of 40 per cent capped at £110,000 per business, although this still means that, for qualifying businesses, their liability will still have virtually doubled when compared to the current year when they benefitted from 75 per cent relief whilst the cap of £110,000 per business remains the same.
“Going forward, from 2026/27 there will be a reduced multiplier for the RHL sector paid for by a higher multiplier for properties with Rateable Values above £500,000.
“Whilst this ongoing assistance for the sector is very much needed, greater support on business rates was required.
“A further announcement was the expected confirmation that private schools would lose their existing 80 per cent charitable relief from 2025/26 tax year which will obviously lead to considerably increased costs for a sector which is also now subject to VAT on school fees from January 1, 2025.
“It is also noted in the supporting paper ‘Transforming Business Rates’ that the duty to provide information annually to the Valuation Office Agency (VOA) will only be formally activated and mandated in time for the 2029 Rating List which commences on April 1, 2029.”
Investment
James Routledge, Head of Investment at Fisher German, said: “Increases to Capital Gains Tax were expected from the Budget, but the increases announced were not as bad as the market was fearing.
“Investment into commercial property was starting to recover anyway for cyclical reasons, with income return the key driver rather than Capital Gains Tax, so this rise should not affect this investment trend dramatically. Similarly, the changes to non-dom status will not affect the bulk of the market either.
“In addition, a calmer UK bond market and reduction in interest rates should encourage an uptick in transaction levels and strengthened investor sentiment.
“The biggest impact will be on the buy-to-let market in the residential sector, with increases in stamp duty on second homes rising from three per cent to five per cent. We would expect fewer buy-to-let landlords investing in residential property for those reasons.
“Overall, we would expect the Chancellor’s Budget to only have a minimal impact on investor behaviour. We will continue to monitor activity closely in the wake of the Budget and advise clients accordingly.”
Development
Ben Marshalsay, Head of Development at Fisher German, commented: “We experienced a very active October as landowners rushed to finalise deals before the Budget announcement. However, the increase in Capital Gains Tax turned out to be less severe than anticipated, so I expect it will be business as usual for any deals that didn’t close in time.
“Housebuilders are already responding positively to the government’s commitment to an additional £500 million investment in the Affordable Homes Programme. This initiative aims to deliver more affordable homes, and while it may take some time to see the full impact, I believe today’s budget will ultimately have a positive effect on land values.”
Green Energy
Darren Edwards, Head of Green Energy & Sustainability at Fisher German, said: “While the budget once again outlined the Government’s plans to make Britain a clean energy superpower, most of the headline information, such as the formation of Great British Energy next year and the funding of new green hydrogen projects, was already widely known across the industry.
“However, confirmation of the invest to grow approach and support for clean energy through the National Wealth Fund was new and consolidated Labour’s recognition of the importance of green energy and sustainable infrastructure.
“The announcements of investment into the electrification of rail lines and further support for the automotive sector and specifically EVs, coupled with the new homes targets, was also interesting but what was missing from the budget was an indication of how these projects will be powered.
“There are already incredible pressures on the electricity grid, and continued investment is needed to ensure there is enough power so that these ambitious projects and targets are successful.”