The October 2026 Budget: What Does It Mean for Homeowners, Buyers and Landlords?

A property market update from M&G

The Chancellor’s Budget on 28 October 2026 introduced a range of measures aimed at easing household costs, supporting first-time buyers and increasing investment in housing. However, changes to the taxation of rental income and continued pressure on household finances mean there is plenty for property owners and prospective buyers to consider.

For those thinking of buying, selling or investing in property, here is our overview of the key announcements and what they could mean for the local property market.

Helping first-time buyers onto the property ladder

One of the most notable announcements was the Government’s Your First Home Scheme, designed to help eligible first-time buyers purchase new-build properties in England.

The scheme is intended to make homeownership more accessible by allowing qualifying buyers to contribute a deposit of between 2.5% and 15%, with the Government providing an equity loan of up to 20% of the purchase price. The Government loan will initially be interest-free for five years, subject to the scheme’s eligibility criteria and conditions.

The Budget also confirmed plans for a new First-Time Buyer ISA, offering another route for prospective buyers to save towards a deposit. In addition, the withdrawal charge on Lifetime ISAs has been reduced to 20%, helping to address the penalty previously faced by first-time buyers purchasing properties above the existing £450,000 price cap.

These measures could offer welcome assistance to buyers struggling to save a deposit. However, eligibility requirements, property price limits and the availability of participating developments will be important considerations.

More investment in affordable housing

The Government has committed an additional £1.5 billion towards social and affordable housing, taking planned capital investment in this area to more than £40 billion over the next decade.

Alongside this, changes to the rules governing certain smaller brownfield developments are intended to make residential construction simpler and less expensive.

Over time, these measures could contribute to an increased supply of housing and provide more opportunities for buyers and renters. However, the impact will depend on how quickly funding translates into completed homes and whether new developments meet demand in individual areas.

For established property markets such as Bury St Edmunds and the surrounding villages, local housing supply, buyer demand and the type of properties available will remain important influences on market conditions.

A significant change for landlords

For landlords, one of the most important announcements concerns the taxation of rental income.

From April 2027, income tax rates on property income in England, Wales and Northern Ireland are scheduled to increase to:

• 24% for the basic rate.

• 44% for the higher rate.

• 49% for the additional rate.

These represent a further two-percentage-point increase on the property income rates already legislated for 2027/28.

The changes could reduce the after-tax returns achieved by some individual landlords, particularly those already facing higher mortgage costs, maintenance expenses and other operating costs. The precise impact will depend on each landlord’s circumstances, allowable expenses, financing arrangements and wider tax position.

For existing landlords, this makes reviewing the financial performance of a rental property increasingly important. Some may decide to retain their investments, while others may reconsider their portfolios or future plans.

For prospective investors, careful consideration of achievable rent, purchase price, financing costs and net income will be essential before committing to a purchase.

Landlords should seek appropriate tax advice before making decisions based on these changes.

What about house prices and the wider property market?

The Budget does not, in itself, provide a clear indication that house prices will rise or fall.

The introduction of additional support for first-time buyers may help some purchasers enter the market, potentially supporting demand for eligible new-build homes. Meanwhile, investment in affordable housing could increase supply over the longer term.

However, wider economic conditions remain important. Mortgage affordability, interest rates, inflation, employment confidence and the availability of suitable properties will all influence buyer behaviour.

The Budget also comes against a backdrop of global economic uncertainty and pressure on household finances. Although the Government has announced measures to ease some living costs, the outlook for mortgage rates and household spending will remain dependent on wider economic developments.

For sellers, this reinforces the importance of realistic pricing and a considered marketing strategy. Buyers continue to make decisions based on affordability, property condition and value for money, rather than national announcements alone.

Help with household energy costs

The Budget also introduced measures intended to ease pressure on household energy bills.

In 2027, eligible households in Council Tax bands A to D in England are due to receive a £100 Household Energy Payment. The Government has also extended temporary VAT relief on electricity bills until 1 July 2027, with an estimated reduction of around £50 in the Ofgem annual price cap in April 2027.

These measures may provide some welcome short-term relief for homeowners and tenants managing household expenses.

For buyers considering a move, running costs remain an important part of assessing affordability. Energy efficiency, insulation, heating systems and the general condition of a property can all influence the cost of living in a home.

What does the Budget mean for sellers?

For homeowners considering a sale, the key message is that the Budget does not remove the need for careful preparation and accurate pricing.

Although additional support for first-time buyers may help certain purchasers, there is no guarantee that this will translate into an immediate increase in demand across every part of the market.

The appeal of an individual property will continue to depend on its location, condition, presentation and asking price, together with the number of competing properties available.

A professional valuation based on comparable evidence and current local demand remains the best starting point for anyone considering a sale.

Our final thoughts

The October 2026 Budget presents a mixed picture for the property market. First-time buyer initiatives and additional investment in housing could create opportunities, while higher taxation on rental income will require landlords to review their financial plans.

For homeowners and prospective buyers, the wider economic outlook and the realities of the local market remain just as important as the national announcements.

At Mortimer & Gausden, we believe informed decisions begin with an understanding of your individual circumstances and the market in which you are buying or selling. Whether you are considering your first home, planning a move, or reviewing a property investment, taking professional advice and understanding your options can help you move forward with confidence.

Thinking of buying or selling? Contact Mortimer & Gausden for a conversation about your plans and an up-to-date assessment of the local property market.

This article is intended as a general overview of the October 2026 Budget and is not financial, mortgage or tax advice. Announced measures may be subject to legislation, eligibility criteria and further guidance. Individual circumstances should be discussed with an appropriately qualified professional.