With the recent tax grabs shaking everything up from income to even the way businesses do business, it’s no wonder that the taxes and reliefs available to buyers on the property market are also set to change.
These changes make it very difficult for the property market to thrive, which could be a potential boon for buyers. With a market slowdown in effect, the market finally seems to be cooling off. Add in the additional stamp duty changes, and new buyers in particular may finally have reached the point they’ve been after: a buyer’s market.
Not everything is roses for new buyers, and the situation is particularly complex for those who already own their own home. That’s why it’s so important to read up on the proposed and current changes that will help you buy a property in 2026:
The End of Stamp Duty Relief
During COVID, the conservative party rolled out a stamp duty relief scheme designed to help the property market thrive, and thrive it did. Stamp duty thresholds were increased dramatically, allowing for more people to move houses for less.
Since April 2025, however, that stamp duty relief has now ended. This means that there are now several stamp duty changes that will impact what you can buy, and even what you’d want to buy.
For one, the threshold for stamp duty has dropped drastically, and is now at its original £125,000 – a rate that hasn’t increased since 2006. To put that into perspective, the average UK house price in 2004 was £150,633, and today it’s, on average, 95% more expensive. This means that the stamp duty now affects virtually every property.
New Proposed Changes in the Autumn Budget
There is plenty of speculation as to what the autumn budget will include, from drastic overhauls of the stamp duty system to a single property tax paid annually, to a proposed opportunity to spread stamp duty costs over several years. There’s even talk of a new, higher council tax band and a potential introduction of capital gains tax for primary properties if a home sells above a set amount.
While all these changes are simply rumours at the moment, one thing is for certain. There will be further changes to the property market, making it either easier to pay off the costs or changes to the costs themselves. Due to the low rumoured thresholds, those looking to buy in the South East of the UK (most notably London) should expect higher rates and taxes when purchasing or selling a property.
Changes to the Property Market
The housing market has undoubtedly slowed down recently, with increases in sale prices in October hovering around the 0.3% mark. In comparison, the average increase for October of the last decade sat at 1.1%.
This slowdown has indicated we’re now in a buyer’s market as fewer buyers are willing to snap up properties at previously seen premium prices. This means that houses are now regularly selling for below asking, as homeowners come to grips with the market realities.
One of the main reasons for the slowdown is, of course, the wait-and-see approach as property owners wait to see what the proposed budget will include.
Mortgage Rates
One of the final considerations any home buyer has to make is the current state of mortgages. The good news is that, once again, mortgage rates have continued to fall. The average five-year fixed term rate is now 4.99%, which is lower than even last week when it sat at 5.03%.
The average rate for the two-year has also dropped from 4.81 to 4.75%.
These mortgage averages (which are for properties with a 75% loan-to-value mortgage) do show promise for home buyers and homeowners. While the Bank of England has held interest rates at 4%, the small but stubborn increase in the consumer price index of 3.8% means that more dramatic decreases in mortgages are likely here to stay for now.
What is available, however, are more flexible mortgage options. First-time buyers today have access to ultra-low fixed deals, low-deposit mortgages, and longer-term loan options to help them get up on the lending ladder, so long as they pass the strict affordability tests.
Home Renovation Costs
The final consideration, particularly for those hoping to save on the upfront costs by buying a fixer-upper, or those who want to extend a property they buy, is that home renovation costs have become cheaper.
The Checkatrade Home Improvement index has noted that average renovation costs have dropped. In the final quarter of 2024, for example, the average bathroom renovation was expected to set you back £6,062. Today, that average is £5,525.
