There were mixed fortunes for the land and property sectors in today’s budget.

After months of speculation, chancellor Rachel Reeves announced £40 billion of tax rises on businesses and the rich which she said would stabilise the public finances, get the economy growing and rebuild public services.

At the heart of it was an increase in national insurance contributions paid by employers and which she said would be worth £25 billion by the end of this Parliament.

Billions of pounds will also be raised from changes to capital gains tax (CGT), air passenger duty on flights by private jet and scrapping the non dom tax regime.

From tomorrow, stamp duty on those buying second homes, residential buy-to-let properties or companies buying residential property in England and Northern Ireland, will rise from 3% to 5%.

While it is designed to discourage those from buying a second home, it could also discourage landlords from expanding their portfolios thus reducing the availability of rental properties and pushing up rents.

However, CGT, the tax on profits made from the sale of particular assets including property, will remain the same at 18% and 24% for higher tax rate payers.

It means it will be harder for people to buy up housing as an investment but not to sell it and so any rental homes which are put up for sale could help first time buyers get on the housing ladder.

Elsewhere the chancellor extended the inheritance tax threshold freeze until 2030 meaning a person could leave an estate worth up to £1 million before it is liable for tax. 

However, she announced reforms to agricultural property relief (APR) and business property relief (BPR).

From April 2026, the first £1 million of combined business and agricultural assets will continue to attract no inheritance tax, but for those assets over that amount, inheritance tax will apply with 50% relief.

The chancellor said revenue raised by these measures will help pay for the £5 billion the chancellor will invest to deliver the government’s housing plan. The Affordable Homes Programme will increase to £3.1 billion and there will be £3 billion worth of support and guarantees to increase the supply of homes.

Sheldon Bosley Knight custodian Mike Cleary said: “We welcome the return to growth and stable inflation predictions.

“The 2% additional tax on investment properties raises the hurdle rate on buy-to-let ownership.”

Associate director and regional sales director, Lara Hawkins said: “It’s a bitter sweet budget from the perspective of a residential estate agent’s chair. The rise in stamp duty for second home purchases, coupled with council tax changes from last year’s budget might discourage investors from buying and increasing private portfolios, limiting demand for some property.

“However as there has been no mention of a stamp duty freeze, meaning thresholds will increase in April 2025, this should encourage more buyers to move sooner rather than later, giving them an incentive to be more proactive this winter.”

Responding to the changes to the agricultural property relief tax, custodian Dan Jackson said: “There is a real concern in the agricultural industry the changes to Inheritance Tax and Agricultural Property Relief could affect up to 70,000 farming families across the country and possibly lead to instability across the sector. This could have knock-on implications to investments in rural business and food security.”

Associate director and head of planning and architecture, Natasha Blackmore da Silva said: “The UK’s current planning system is broken, and it is good to hear the chancellor recognises change is necessary to unlock development sites for housing.

“The proposed planning reforms are promising, as they address long-standing challenges related to approval delays, land availability, and local regulatory barriers.

“The new streamlined approach and local authority empowerment could accelerate development; however, it will be the planning system’s ability to adapt to such extensive changes without delay that will be key to achieving Labour’s ambitious housing targets.

“Whilst I am hopeful the upcoming Planning and Infrastructure Bill will create the simplified and streamlined planning system need, I remain cautious regarding the successful execution of these promises.”