On 18 August, reports began circulating of sweeping property tax reforms under consideration ahead of the Autumn Budget. The Budget date is now confirmed for 26 November – a month later than last year – leaving the UK property market with over two months of uncertainty.

History shows that when policy change looms, whether during elections, interest rate shifts, or even COVID-19, the housing market often slows. Buyers, including first-time buyers, step back to wait for clarity. Sellers hesitate, chains weaken, and transactions drop. For homeowners looking to sell, this can mean longer waits and lower asking prices.

At PriceHubble, we’ve been analysing data to assess whether the market is already reacting – and the early signs are there.

What new property tax reforms could include

The rumoured reforms are wide-ranging and could reshape how residential property is taxed in the UK. Among the measures being discussed by central government and policy advisers are:

• Replacing the main rate of Stamp Duty Land Tax (SDLT) with a national property tax paid by the seller on homes over £500,000 – potentially a more proportional property tax linked to the value of the property.
  
  
• An annual property tax for homes over £500,000, either for all homes or only those transacting.
  
  
• Council tax reform, potentially replaced by a local property tax paid by property owners, not residents – a move that would shift revenues for local authorities.
  
  
• Removal of Private Residence Relief for Capital Gains Tax (CGT) on homes over £1.5m, affecting many properties.
  
  
• A new mansion or wealth tax, which some think tanks have suggested could raise revenues without increasing income tax or National Insurance.
  
  

Policy voices such as Tim Leunig, former Treasury adviser, have argued for taxing property based on its actual market value rather than a fixed banding system. Meanwhile, political figures including Rachel Reeves and Starmer have hinted that tax reform may be central to the government’s growth strategy.

Not all of these proposals will make it into the final Budget, but the speculation is already shaping behaviour among homebuyers and downsizers considering moving home.

A housing market already in flux

2025 began with higher property availability than 2024 – partly because more homes were being listed, but also because standing stock had built up. Even after the March sales peak (driven by earlier SDLT changes), availability was higher year-on-year.

Transactions peaked in March (in response to the changes to SDLT) before falling back in April and May, with a slight recovery in June. By July, sales remained above 2024 levels – but momentum was fragile. The new property tax rumours risk adding another slowdown just as the market was stabilising.

Regional breakdown: where property tax impact could hit hardest

Nationally, 69% of properties currently for sale are priced under £500,000. Rumours suggest buyers' tax liability could fall for these homes, giving many would-be purchasers an incentive to wait until after the Budget.

At the other end of the scale, 4% of homes are priced above £1.5m – potentially facing the sharpest changes to rates of tax if CGT exemptions are reduced or removed.

But the picture varies sharply by region:

• In London and the South East, fewer than half (49%) of homes for sale are under £500,000, while 8% are over £1.5m – making these markets particularly exposed.

• In regions where average property prices are lower, any SDLT reform could unlock stalled demand and help first-time buyers take their first home step onto the ladder.

Early data shows market reaction to property tax rumours

It is still early, but some changes are already visible in the data.

• Listings: After rumours began circulating in the second half of August, there were 6.1% fewer new property listings than in the first half of the month. This affected most price bands.

• High-end activity: Homes over £1.5m saw a small increase in listings – likely property owners trying to complete sales before any higher rate taxes take effect. With the Budget now set for late November, more sellers may follow, though this is likely a short-term effect.

• Withdrawals: There was a 23% rise in properties being withdrawn from the market without a sale in the second half of August. The sharpest rise was among homes under £500,000, where withdrawals were up 27% – exactly the homes most likely to benefit from a post-Budget SDLT cut.
  

Transactions at risk as tax reform uncertainty grows

So far this year, transactions have been 19% higher than in 2024, boosted by the March SDLT rush and last year’s election dip. But with new listings falling, withdrawals rising and confidence wavering, HMRC data for the next few months may show a marked decline.

When the market stalls, chains break, sales fall through, and house prices can soften as a result. Any fall in transactions will affect not only estate agents, developers, and mortgage lenders, but also Treasury revenues.

What estate agents are seeing

To capture frontline sentiment, PriceHubble polled UK estate agents in early September. Nearly half reported some impact from the rumours on their local markets.

• Overall, almost half of estate agents polled reported an impact – whether more fall throughs, fewer listings, fewer applicants, or all three

• 35% noted a fall in new listings since the property tax change rumours began.

• Others highlighted hesitancy among both buyers and sellers, including downsizers delaying their decision to move.
  
  

These findings mirror what the data is beginning to show: supply is tightening even before any policy has been confirmed.

Looking ahead

Over the next few months, the UK housing market is likely to enter a holding pattern. Sellers at the top end may accelerate deals, while buyers at the lower end – particularly first-time buyers – may wait for clarity.

The final shape of the reforms remains to be seen, but the impact of the rumours is already clear: fewer listings, more withdrawals, and an increased risk of a slowdown in transactions.

For property experts, lenders, and policymakers, the question now is not only what reforms will be announced in November – but how much damage the uncertainty will have caused by then.

In times of uncertainty, access to high-quality UK property market data, local insights, accurate property valuation solutions and insight-led marketing content is critical. PriceHubble’s solutions help lenders, agents, and developers monitor supply, demand, and pricing trends so they can react quickly to changing market conditions and share regular branded content to demonstrate their expertise.