The Budget and Liverpool property

The first budget of the new Labour Government was an eagerly anticipated event, especially given the huge amount of “leaked” potential changes and rumours of new and changed taxes. Today’s announcement by Rachel Reeves the chancellor delivered a a budget that is expected to raise over £40billion covering the “black hole” of £22billion left by the previous government in addition to another circa £20billion for areas of investment, NHS etc.

From a property perspective there was probably less announcements/changes than anticipated with the main items listed below.

Main Property announcements
• The rate of Capital Gains Tax (CGT) remains unchanged at whilst it rose for other assets.
• The second home surcharge (Buy to Let, Holiday Home etc) was increased from 3% to 5% overnight 30th October 2025.
• Inheritance tax reliefs that allow a main home to excluded from an estate remain untouched (which essentially allows a couple to pay tax on the first £1m of wealth on their main home).
• Agricultural and business property relief will be restricted to the first £1million from April 2026 and reduced by 50% thereafter.

The effect of the changes
Whilst the level of CGT remaining unchanged was welcomed, the surprise increase on SDLT from 3% to 5% could have a negative effect on the residential market in Liverpool City Centre. In a market where Buy to Let investments are already borderline an additional cost of around £3,500 (based upon an average selling price in Liverpool city centre of £167,500) could result in some existing transactions “falling over”.

There is also a risk that some investors will consolidate their existing portfolio rather than expanding thereby heaping more pressure/constraints of the supply of residential accommodation, applying further upward pressure on rents. With the imminent arrival of the new Renters Rights Bill it is difficult for us to see how the supply of apartments in Liverpool City Centre will continue to grow to cope with the increased demand from renters wanting to live here.