The Autumn Budget has introduced a series of measures that could make homeownership more expensive and complex.
Housing expert Michael Holmes warns that these changes are likely to influence both homeowners’ renovation decisions and long-term property plans.
He says the new taxes and levies could have significant knock-on effects for the wider housing market and the economy.
Michael Holmes is Vice‑Chair of National Custom and Self Build Association (NaCSBA), a major trade body for self‑builders and homeowners building or renovating their own properties in the UK.
1. Mansion Tax could discourage home improvements
Holmes explains that the Mansion Tax, set to begin in 2028, will affect around 2.5 million high-value homes.
“Although the initial rates appear modest, this tax represents a fundamental change in how homeownership is treated,” he says.
Homeowners may now hesitate to make renovations or extensions if doing so pushes their property over the tax threshold.
2. Renovations may no longer be worthwhile
“The Mansion Tax introduces a cumulative levy on home improvements, which over time could outweigh any added value to the property,” Holmes warns.
Many homeowners undertake renovations for lifestyle reasons rather than purely financial gain, but this tax could change that calculation.
Holmes says the measure may discourage people from upgrading their homes, particularly as improvements now carry long-term tax implications.
3. Retirees could face extra pressure
Holmes notes that future increases in the tax threshold or rates could place additional pressure on long-term homeowners.
“Empty nesters may feel incentivised to downsize or cash in equity before the tax hits,” he explains. This could lead to changes in retirement planning and property decisions for older homeowners.
4. Buy-to-let investors and rental costs
Holmes warns that landlords will also feel the pinch, with a further 2% tax on buy-to-let properties from 2026.
“These measures are prompting some investors to leave the market, reducing supply and likely driving up rents,” he says.
The combined effect of taxes on homeowners and landlords could create wider strain on the housing market.
5. Wider impact on housebuilding and the economy
Holmes says that property taxes influence more than just individual homeowners - they also affect construction and the wider economy.
“The housing market drives UK growth, and any measures that discourage homeownership or renovations will have knock-on effects on housebuilding and economic activity,” he warns.
With the Autumn Budget predicted to raise mortgage rates, reduce housing supply, and increase house prices, according to the OBR it seems what Michael Holmes is predicting could be set to come true.
He adds that these changes could slow growth while reducing the incentives for homeowners to invest in their properties.
