Rightmove warns Budget property tax rumours could hit London and south-east housing markets

Rumours that the chancellor could announce major property tax changes in the Autumn Budget have unnerved parts of the housing market and would place particular pressure on London and the south‑east, according to analysis by property portal Rightmove.

Rightmove said speculation that measures such as a national proportional property tax on homes worth more than £500,000, the imposition of national insurance-style charges on landlords, or a so‑called mansion tax on properties above about £1.5 million is already prompting some sellers and landlords to reassess plans. The portal cautioned that extended uncertainty ahead of a Budget expected at the end of November could dent activity in higher price brackets.

Rightmove’s analysis finds the proposed changes would fall unevenly across the country. If stamp duty rules were altered for properties above £500,000, nearly 60% of sales in London would be affected, compared with 22% across England and 8% in the North East. More than one in ten London homes — about 11% — are priced at £1.5 million or more and would be liable for a mansion tax under the rumours, the portal said, versus an average of 2% outside the capital.

"Rumours of property tax changes began swirling in mid‑August, and with the Budget itself not arriving until the end of November, this kind of extended uncertainty can affect market activity, especially in the higher price brackets," said Coleen Babcock, a property expert at Rightmove. She added the analysis highlights how the changes would be "London- and south England-centric" and could "risk exacerbating regional divides."

Market indicators so far show modest movement rather than a sharp shift. Rightmove reported average asking prices across Britain rose by £1,517, or 0.4%, in the month to a new average of £370,257. However, asking prices were 0.1% lower than at the same point a year earlier after several months of muted growth, with the fall driven by London and the south of England.

The portal said the number of homes for sale is showing a sharper rise in the south. New seller inventory in the south of England is up 9% year‑on‑year, compared with 2% across the rest of Great Britain, a dynamic that has put more downward pressure on pricing in the south as sellers compete for buyers. In the south it took an average of five days longer to find a buyer than elsewhere, Rightmove said.

Despite softer annual asking prices in some areas, the number of sales being agreed has increased. Rightmove said sales agreed across Britain were 4% higher than a year ago; sales were up 3% in the south of England and 5% in the rest of Britain. Regionally, the south west recorded a 1.3% fall in asking prices year‑on‑year while the north west saw prices rise by 3.2%. The West Midlands was the only more northern region to post an annual drop in new seller asking prices.

Estate agent Jeremy Leaf, a north London agent and former Residential chairman at the Royal Institution of Chartered Surveyors, warned that Rightmove tracks asking prices rather than achieved sale prices and that asking figures can be "aspirational starting points." He said some vendors remain unrealistic and that competitively priced homes stand out amid greater choice.

Tomer Aboody, director of specialist lender MT Finance, said first‑time buyers still face affordability constraints because average property prices remain higher than typical income multiples. He urged stamp duty reform to encourage more homes onto the market, facilitate downsizing and free up smaller properties for new buyers, arguing the housing market cycle is a significant element of broader economic performance.

The market has also been influenced by monetary policy: on Aug. 7 the Bank of England cut its base rate from 4.25% to 4%, the lowest since March 2023. Analysts widely expect the central bank to hold rates in its September decision rather than cut further. Lower mortgage rates and rising wages, combined with static house prices, have helped buyer affordability to improve slightly and supported the rise in sales agreed compared with a year ago, Rightmove said.

Mortgage advisers and lenders are urging borrowers whose fixed deals are ending, buyers with purchases agreed, and buy‑to‑let landlords to review options early and secure arrangements in good time. Industry guidance recommends comparing rates, consulting brokers and, where appropriate, fixing a new deal several months before a current rate ends to avoid last‑minute pressures. Buy‑to‑let landlords, particularly those on interest‑only arrangements, were warned they could face sharper monthly cost increases on remortgage.

Political choices in the upcoming Budget, Rightmove said, will be closely watched by agents, sellers and buyers alike because of their potential to shift the balance of demand geographically and alter incentives for owners and investors. Any measures that concentrate costs on higher‑value properties would, according to the portal, have an outsized effect in London and higher‑priced southern markets and could amplify existing regional differences in housing performance.