With the Autumn Budget set for 26 November, commercial property markets are bracing for one of the most consequential fiscal events in recent years.
The Chancellor faces a £30bn-plus fiscal gap, weak economic growth, and a need to signal renewed stability to investors.
The result? A Budget widely expected to combine revenue-raising measures with targeted pro-growth commitments, with direct implications for landlords, occupiers and developers across the UK.
If recent commentary and anecdotal feedback based on what we are seeing on the ground is anything to go by, uncertainty is already influencing property decision-making.
Major housebuilders have reported slower sales, the UK housing market is cooling, and commercial investors are proceeding cautiously as they await clarity on taxes, planning and future government spending.
Below, we unpack the potential outcomes of this year’s Autumn Budget and what it could mean for commercial real estate in the UK.
Challenging fiscal backdrop
Analysts now widely agree that the government will need to raise in the region of £30bn–£40bn to meet its fiscal rules.
Borrowing remains elevated, inflation has proved sticky, and real growth has underperformed expectations. This leaves limited room for manoeuvre for the Chancellor, and increases the likelihood that tax rises, especially those targeted at wealth, property and capital, will form part of the Budget.
For property, the macro backdrop matters. Investor sentiment, occupier demand, business confidence and development viability all react to fiscal direction.
A Budget perceived as “austerity-leaning” may dampen appetite, while credible pro-growth reforms, planning acceleration, green investment or targeted incentives, could support activity into 2026.
Five key areas to watch
- Business rates reform
Business rates remain one of the most pressing issues for commercial occupiers. Sector analysis by our business rates experts this month suggests that reforms could potentially target:
- Reliefs for smaller or struggling high-street premises, possibly made permanent.
- Higher burdens on large, high-value commercial sites, especially offices, logistics hubs, with retail flagships potentially avoiding the increase.
- Long-term structural reform, potentially moving towards more frequent revaluations or broader modernisation.
Business rates are a fundamental component of occupancy costs.
Now is an ideal time to review your business rates exposure across portfolios and reassess the cost impact of upcoming leases, renewals or revaluation.
- Property taxation
Stamp Duty Land Tax (SDLT) could face significant restructuring, potentially even replacement for higher-value homes with an annual property levy.
While this is directed at the residential property market, commercial property should not overlook the ripple effects:
- Higher household taxation reduces mobility and potentially slows residential development and regeneration.
- An annual, value-linked tax could become a template for broader property taxation reforms.
- Uncertainty in the residential market influences investor appetite for mixed-use projects and urban regeneration schemes.
Richard Dawtrey, Head of Property Investment at Vail Williams, commented: “Delays or uncertainty around taxation can discourage transactions and reduce liquidity. Deals may take longer to complete, with greater emphasis on future tax-burden modelling. Investors and development clients should consider scenario-modelling around changes to SDLT or broader property taxes, especially where mixed-use or residential components influence scheme viability.”
- Capital taxes: CGT, IHT and landlord taxation under review
The Chancellor is expected to raise revenue from capital rather than labour, meaning that Capital Gains Tax (CGT), Inheritance Tax (IHT) and certain landlord tax treatments could be tightened.
Potential changes could include:
- Reducing CGT allowances or aligning CGT rates closer to income tax.
- Limiting IHT reliefs on high-value homes.
- Extending National Insurance to rental income.
For commercial property investors, these reforms, could have an indirect knock-on effect – from reducing net returns or altering disposal timescales, to affecting refinancing decisions.
Higher CGT could also discourage transactional churn and reduce the volume of property deals into 2026.
Meanwhile, tightening landlord taxation reduces appetite for small-scale investors which could weaken liquidity in certain market segments, such as small-scale housing development, for example.
