Market Insights November 2025

Following the much-awaited Budget announcement yesterday, we share our insights below.

If you have any questions about the London property market or if a conversation would be helpful, please get in touch.

In the meantime, wishing a very happy Thanksgiving to those celebrating today.

Best Wishes

Jo Eccles

Founder and Managing Director, Eccord

+44 (0) 20 7244 4482 / +44 (0) 7740 825 875

jo.eccles@eccord.com

LinkedIn | Instagram

Uncertainty and speculation, followed by relief

After months of speculation, we finally have certainty following yesterday’s Budget announcement. Having spoken with many past and potential clients, tax advisors, lawyers and bankers over the past 24 hours, this brings unanimous relief with those who already own property and those who are considering buying. Leading selling agents are reporting the same. 

The prime property market had been bracing itself for significant additional tax, with many expecting an annual percentage of property value over £2 million. The newly announced High Value Council Tax Surcharge (HVCTS) is a much less severe and therefore welcome alternative. As one of our clients said, “I was waiting for a bomb, and it never went off!”.

The uncertainty has significantly muted activity over the past few of months, which is traditionally one of busiest times of the year for property searches and transactions in the run up to Christmas. Based on our conversations, we expect to see buyers and sellers emerge from the sidelines in the new year, or sooner.

We have a number of buying and rental clients under offer who will now proceed, whereas they may have had second thoughts if the charge had been more extreme. And two new searches are keen to press ahead and view properties ahead of the Christmas break.

Many sellers, expecting the budget to be more severe, had been advised to hold back their properties until spring, but we expect to see this pulled forward and new stock come to the market much sooner. 

High Value Council Tax Surcharge – how it will work?

As of April 2028, properties in England worth £2 million or more will be placed into bands based on their property value and charged an additional levy on top of council tax – see table.

The Valuation Office will conduct a targeted valuation exercise to identify properties above £2 million and revenues will flow to central government, rather than remaining with local government, as is the case for standard council tax. Charges will increase in line with CPI inflation each year from 2029-30 onwards.

It is stated that the surcharge will be levied on property owners, rather than occupiers. In the case of rental properties, the occupier – the tenant – usually pays council tax, so it seems that the surcharge will need to be billed to the landlord separately. 

There will be further government consulting on measures for those who may struggle to pay the charge, such as potential provisions for the charge to be rolled-up and only paid on the transfer of the property on an inheritance, gift, or sale. 

We also await further information about potential reliefs and exemptions and the treatment of ownership structures (such as companies, funds, trusts and partnerships), or situations where someone is required to live in a property as a condition of their job for example.

Many second homes already face double council tax, so this will be an additional expense on top. 

High Value Council Tax Surcharge charging structure

Are we at the bottom?

We are confident saying we expect a much more functioning market as we enter 2026; dynamics will remain nuanced, sentiment is likely to be stronger but cautious, and credibility will continue to be key for accessing best in class homes and securing discounts.

Whether we’re at the bottom is extremely difficult to say, but we know from nearly two decades of specialising in prime central London, the market is heavily sentiment driven. There will always be some who are led by financials alone, but in reality, the majority of transactions still remain lifestyle driven – for family reasons, school logistics, long term stability and more.

Over the past 6 months, in the absence of certainty, buyers have needed to see compelling value in order to tempt them into action. This has been evident across all price ranges where only good quality, realistically priced properties have attracted interest – and even competitive bidding in numerous cases. For many however, they have stalled decisions and sat on the sidelines – until now. 

We of course cannot assume everyone will be immune to the new council tax surcharge. One city professional shared that his monthly outgoings are c £700 higher per month since VAT was introduced on private school fees last year. And the new surcharge announced today will add an additional c £400 per month for a home worth £3.5m - £5m. Not all middle and upper-middle class buyers have almost £1,000 of additional headroom in their disposable income per month and this will place further pressure on them. 

But there are many who will feel minimal impact and the surcharge announcement now enables them to make decisions and press ahead with certainty and the confidence to make longer term commitments. 

As with any pause in activity, which we have seen in the run up to the budget, pent up activity is on the sidelines and we believe we will see more buyers and sellers entering the market in the new year – or earlier. 

Some will advertise on market, and others will opt for discreetly off market. Many are still unwilling to part with their property for less than they paid for it – which is almost a certainty if they purchased since the highs of the 2014 peak. 

Previously, sellers have turned to the rental market to ‘sit out the market’ but with the Renters’ Rights Act coming into force on 1st May 2026, bringing additional cost and regulatory responsibility, many will re-think this approach and decide to sell. Other sellers have already become more realistic in their expectations after prolonged market exposure.

We will continue to successfully navigate clients through market conditions to ensure they have access to all opportunities, achieve competitive outcomes, and have complete confidence in their decision making. If you would like to discuss the market in more detail or have any questions, please get in touch: jo.eccles@eccord.com  

Additional income tax for landlords

From April 2027, landlords will face an additional 2% tax on income from rental properties, which will mean a tax rate of 22%, 42% and 47% for basic, higher and additional rate taxpayers respectively. This will impact already low margins for landlords, who are facing higher costs and regulatory responsibility. 

Landlords are increasingly reluctant to self-manage their properties due to the challenges of ever more demanding tenants, competition for good and reliable contractors and new regulations coming into force such as selective licencing schemes. In addition, the Renters’ Rights Act 2025 will take effect on 1st May 2026 and will have a significant impact on landlords renting out properties under £1,900 p/w. 

All AST tenancies under this threshold will automatically shift to open-ended periodic tenancies, with no fixed end date. This means they will continue indefinitely until either a tenant serves two months’ notice or the landlord meets one of the approved grounds for repossession. Good landlords with well-maintained properties can still expect long, stable tenancies, but tenants will be able to leave more easily if a property or service falls short.

Landlords can end tenancies if they genuinely wish to sell, by correctly serving a Section 8 notice, but they will need to meet the 12-month minimum occupancy requirement and give 4 months’ notice. If the property does not sell, or a sale falls through, the landlord will not be able to re-let the property for 12 months.

Additional reforms include rent rises limited to once a year, with any proposed increases evidenced to be in line with the local market rate; an end to bidding wars, with asking rents published publicly and bids above that level not permitted; and new rights for tenants to request a pet, with landlords required to provide a reasonable justification for refusal in writing within 28 days.

At such a pivotal moment for our landlords, we are delighted to welcome Catriona Mackay to our team as a Senior Rental Specialist. With nearly a decade of prime lettings experience and a proven track record in securing high quality tenants, Catriona will be instrumental in supporting our landlords through these changes and ensuring they remain fully compliant. Please don’t hesitate to get in touch if you would like to discuss your options or any of these reforms in more detail: catriona.mackay@eccord.com / meet Catriona