RICS statement on 2025 Autumn Budget

Recent RICS research* highlights the potential risk of the application of National Insurance at a rate of 2% to landlord income. The findings indicate that these tax changes could encourage landlords to reconsider their investment in the market. This could have a knock-on effect of increased costs to tenants.

As the industry leader in valuation, RICS will ensure that surveyors’ expertise supports the fair implementation of the High Value Council Tax Surcharge.

RICS Chief Executive, Justin Young, said: “The Government faces many challenges, and RICS recognises the difficult balancing act it must play. There are positive moves, such as new support for apprentices under the age of 25, which should hopefully expand the pipeline of new talent into the surveying profession. It is encouraging that the Government is prioritising necessary reforms to the business rates system, and we are committed to supporting this effort through our members’ expertise.

“Whilst these changes are welcome, there are several measures which may weaken the housing market, such as raising tax on dividends, property, and savings income by 2%. Furthermore, it seems that commitments to sustainability are weakening. RICS is working with the Government to mitigate these effects and help it deliver its objectives.”

Simon Rubinsohn, RICS Chief Economist commented:

“At the end of the day, this was a Budget that was crafted against the backdrop of a more generous set of assumptions from the Office for Budget Responsibility (OBR) than had been feared. While productivity growth was downgraded as anticipated, changes to wage and inflation projections largely compensated for the budgetary impact of the former. As result, talk of a fiscal hole largely proved illusory. Instead, the Chancellor was able to announce increases in spending as well as a bolstering of the fiscal 'buffer' through a series of back-end loaded tax increases.

“In terms of the measures announced relating specifically to the property sector, the 'high value council tax surcharge' goes some way to addressing some of the regressive nature of Council Tax but by bolting this measure on homes over £2m, it falls way short of a more desirable thorough review of local government financing. The additional charge is not due to kick-in until 2028 which may delay the immediate impact it has on the housing market but with this tier of residential property already under some pressure and transactions subdued, the prospect of its introduction will likely to weigh further on this segment of the market.

“The additional tax rates on property income could at the margin exacerbate the demand-supply imbalance in the private rental sector (PRS) although with savings and dividend tax rates also rising, the relative attraction of real estate for landlords isn't going to materially shift. That said, for those owners of property in the PRS who were edging towards scaling back their investment, the announcement today may accelerate the decision. Moreover, it is likely that the tax will in some way be passed on to tenants; it is reasonable to assume that rents will rise a little faster than might have otherwise been the case.

“Finally in terms of the government delivering on its 1.5 million homes over the lifetime of this parliament there was little new to draw any encouraging from. Projections for residential investment, which is a proxy for housebuilding, were actually revised down for the next three years compared with the March forecast with the OBR indicating that it is unlikely to be until 2027 that there is a material uplift in development helped by the passage of the Planning and Infrastructure Bill.”

-ENDS-

Notes to editors

*RICS/Opinium Polling of 500 PRS landlords 11-14 November 2025. Key findings include: 

• 62% of landlords would be more likely to raise rents if NI is applied. 
• Almost half (48%) of all landlords own just one property, meaning many small providers could be disproportionately affected. 
• Taxation has become the biggest barrier to investment, cited by 42% of landlords. 
• 23% have already sold or reduced their portfolios in the past two years, and a third expect to exit or downsize within the next two. 
• 40% would scale back repairs and improvements, potentially undermining home quality.
   

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For more information

Kris Hicks
Khicks@rics.org