Budget 2026 and property: what changed for London buyers, landlords and owners

Chancellor John Healey delivered his first Budget on Wednesday 28 October 2026. For property, the headline is what did not happen: stamp duty was left alone. What did happen is a confirmed first-time buyer scheme with real numbers, a further tax rise for landlords, a new savings account for first homes and a cut to one Lifetime ISA penalty that matters more in London than anywhere else. Here is each change, who it affects and what to do about it.

The changes at a glance

Stamp duty: unchanged

Housing groups had asked for a stamp duty holiday for first-time buyers, and some had asked for wider reform. Neither came. A first-time buyer still pays nothing up to £300,000 on a home costing up to £500,000, and 5% on the slice between £300,000 and £500,000. Above £500,000 the relief disappears altogether, which still catches a large share of London purchases. Other buyers pay from £125,000, and the 5% surcharge on second homes and buy to let purchases stays.

Your First Home: the numbers are in

When the scheme was announced on 26 September only the 2.5% deposit and 20% loan were known. The Budget filled in most of the gaps.

• £4.7 billion of funding, aimed at about 70,000 households.
• Deposit of 2.5% minimum and 15% maximum.
• Equity loan of 20% of the price on a new build home, interest free for five years. Budget reporting puts the charge at 1.5% in year six and 3% from year seven. The full guidance is still to come.
• Income cap of £110,000 per household, or £140,000 in London.
• Price caps set from local median prices: £650,000 in inner London and £500,000 in outer London.
• Start date: applications are due to open in spring 2027.

The London caps are higher than many expected, and they decide who can use the scheme here. A £500,000 cap in outer London covers most one and two bedroom new build flats in Barking, Croydon, Bexley and Enfield. A £650,000 cap in inner London is tighter, because new build two beds in the central boroughs are often marketed above it. Zoopla's view is that local caps give the scheme about half the reach of Help to Buy.

On a £400,000 outer London flat the split is £10,000 deposit, £80,000 equity loan and a £310,000 mortgage. Our Your First Home calculator now uses the confirmed terms, so you can run your own price and rate.

What it means for a buyer. The scheme only covers new builds, and a 2.5% stake leaves almost no cushion. A new build warranty covers major structural failure, not the cracked tiles, poor sealing, missing insulation and drainage faults that show up in the first two years. With a scheme that has a confirmed start date, we would expect developers to push for exchange quickly. A Level 2 survey or a snagging inspection before completion is the cheapest protection you can buy. It is also your only real leverage, because the developer's attention drops once the money has changed hands.

Lifetime ISA: a better deal for London buyers right now

From 29 October 2026, using a Lifetime ISA on a home costing more than £450,000 carries a 20% withdrawal charge instead of 25%. That sounds technical, but the effect is simple. At 25% the charge took back the government bonus and some of your own savings. At 20% it takes back the bonus and nothing more. With the average London home at around £554,000, many London savers had money trapped in an account they could not use without losing some of it. They can now.

The Lifetime ISA is being replaced by a First Time Buyer ISA from April 2029: up to £4,000 a year, a 25% bonus, homes up to £450,000 and no upper age limit.

Landlords: another two points

Tax on rental income rises by a further two percentage points from April 2027, on top of the two points already announced for that date. Rental profit will be taxed at 24%, 44% and 49% depending on your band. For a higher rate landlord with £20,000 of taxable rental profit, that is £400 a year more than the 2025 Budget had already set, and £800 a year more than today.

Expect more landlords to sell, and more to look at moving their portfolio into a company. Both need numbers you can defend:

• Selling means a capital gains tax calculation, and if the property was inherited or gifted, the base cost is its market value on that date. A retrospective CGT valuation sets that figure for HMRC.
• Moving into a company is treated as a sale at market value, so stamp duty and capital gains tax are worked out on a valuation. HMRC can and does challenge figures that look low.

If you are buying from a landlord who is selling up, ask why the property is on the market and look closely at its condition. A home that has been let for years often has deferred maintenance that a Level 3 building survey will find and price.

The £2 million council tax surcharge

The High Value Council Tax Surcharge was confirmed for homes worth £2 million or more, with the first bills due in 2028. It is charged on top of normal council tax, from £2,500 a year up to £7,500 for homes over £5 million. In London that reaches well beyond the obvious postcodes. If your home sits near a band edge, it is worth knowing its market value from an independent RICS valuation before the banding is settled, rather than after.

Capital gains tax and inheritance tax

Capital gains tax rates stay at 18% and 24%. The lifetime limit for Business Asset Disposal Relief halves from £1 million to £500,000 from April 2027, which matters to anyone selling a trading business that owns its premises.

There was no new inheritance tax change. The frozen thresholds stay, and unused pension funds come into the estate for inheritance tax from April 2027 as already planned. That will push more estates over the threshold, and when an estate is close to the line, the value put on the house usually decides whether tax is due. A probate valuation from a RICS Registered Valuer is the evidence HMRC and the Valuation Office Agency expect to see.

What to do now

• Buying a new build with Your First Home: get a decision in principle on a 77.5% loan, compare new build asking prices with second hand homes nearby, and book a survey before you complete.
• Saving in a Lifetime ISA for a London home over £450,000: the penalty now only takes back the bonus. Check your numbers before you open anything new.
• Landlord thinking of selling or incorporating: get the valuation first. The tax follows from it.
• Executor or home owner near £2 million: know the market value, with evidence.

If any of these apply to you, get a quote or call us on 020 3900 3902. We are RICS regulated chartered surveyors and RICS Registered Valuers covering London and the South East.

Figures come from the Budget 2026 document published by HM Treasury on 28 October 2026 and reporting by The Negotiator, Today's Conveyancer, Financial Reporter and Bishop Fleming. The Your First Home charge after year five comes from Budget day reporting and has not yet been set out in scheme guidance. Nothing here is tax, mortgage or financial advice.