The 2025 Budget brings several major changes aimed at easing the cost of living, stabilising inflation, and strengthening the housing market. Whether you’re a landlord, homeowner, first-time buyer or renter, these updates will have an impact on the property landscape over the next few years.
In this blog, I break down the important points simply and clearly.
1. Cost of Living Relief – Lower Bills & Lower Inflation
The Budget introduces several measures to reduce day-to-day living costs, which directly support renters and homeowners:
Lower Energy Bills
From April 2026, households will see around £150 removed from their annual energy bills.
This is because the government is:
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Funding 75% of the domestic Renewables Obligation costs
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Ending the Energy Company Obligation fee on bills
This reduction helps renters and homeowners struggling with high energy costs.
Transport & Everyday Savings
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Rail fares frozen for one year (first time in 30 years)
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Prescription charges frozen
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Fuel duty 5p cut extended until August 2026
These indirectly help household affordability which is important for mortgage affordability tests and renters trying to keep overall costs down.
2. Housing, Planning & Development – More Homes Incoming
The government is continuing its focus on increasing housing supply and speeding up development.
Key points include:
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Continued planning reform to accelerate building
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Previous reforms already projected to deliver 170,000 additional homes by 2029–2030
This could benefit buyers struggling with low local stock and landlords looking to invest in new builds.
3. Tax Changes That Affect Property Owners & Landlords
This Budget places a clear emphasis on taxing wealth and assets more fairly, and property is a major part of that.
Higher Taxes on Property Income
Taxes on property, dividend and savings income are increasing.
Reason: These income streams currently do not have an equivalent to National Insurance. Existing allowances remain to protect lower-income investors.
High Value Council Tax Surcharge
A new surcharge will apply to homes worth over £2 million.
For most Manchester & South Manchester properties, this won’t apply but it may impact premium markets in London, Cheshire, and parts of the South East.
4. Welfare & Universal Credit Changes — Big Impacts for Renters
The government is:
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Scrapping the two-child limit in Universal Credit
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Reforming sick-related benefits to encourage employment
For landlords, especially those renting to families or tenants on UC, this likely means:
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More stable income for renters
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Potential reduction in arrears
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Higher affordability for larger families
5. Inflation Expected to Fall — Good News for Mortgages
The OBR forecasts that the Budget’s measures will:
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Reduce inflation by 0.4 percentage points next year
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Support the trend toward lower interest rates
The Bank of England has already cut rates five times this Parliament. Lower inflation combined with falling rates could mean:
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More attractive mortgages
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Increased buyer activity
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Renewed confidence for sellers
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Better remortgage options for landlords
6. Employment Outlook & Rental Demand
Employment is forecast to grow from 34.2 million to 35.4 million people by 2030, with unemployment falling to 4.1% by the end of the forecast period.
A stronger labour market usually results in:
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More rental demand
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More confident buyers
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Better affordability tests
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Stronger local economies in areas like Manchester
7. Summary: What This Means for the Property Market
For Landlords
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Higher taxes on property income = reduced net yield
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UC changes may reduce arrears
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Lower inflation and lower rates will help with remortgaging
For Buyers
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Lower inflation + lower interest rates = better borrowing conditions
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Increased housing supply in coming years
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Cost-of-living help improves mortgage affordability
For Renters
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Lower energy bills
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UC reform may increase household income
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Cost-of-living freeze on transport and healthcare
For Sellers
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As borrowing conditions improve, buyer confidence is expected to return
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Lower inflation supports stronger market activity
Final Thoughts
Overall, Budget 2025 aims to stabilise the economy while easing pressure on households. For the property sector, the impact is a mix of increased taxes on landlords, positive affordability measures for renters and buyers, and long-term growth through planning reform and lower inflation.
