Autumn Budget 'Time Bomb': Why Landlords and Investors Are Bracing for Impact

Record Tax Burden on Property Investors

New HMRC data reveals that Stamp Duty Land Tax (SDLT) receipts soared to £14.6 billion in the 12 months to August 2025 - up from £12 billion the year before. That's a 22% increase in a single year, placing an unprecedented tax burden on those investing in UK property.

For landlords already grappling with eroding yields and tighter lending conditions, the numbers paint a worrying picture, but the question now is: what happens next?

What Could the Autumn Budget Bring?

Speculation is rife across the property market about potential reforms the Chancellor could unveil. While nothing has been confirmed, the proposals being discussed include:

• Annual property tax: Replacing stamp duty with a new national tax charged yearly on homes worth over £500,000, rather than paid upfront at purchase.

• 'Mansion tax' on capital gains: Ending exemptions on the sale of high-value properties, leaving investors facing substantial exit bills.

• National Insurance on rental income: Treating "passive" rental income as earned employment income for tax purposes.

Even as proposals, these ideas are already fuelling nervousness. For landlords and investors, sudden changes to the tax system can wreck deal economics overnight - turning profitable projects into loss-makers.

The Risk of Paralysing Investment

If the Chancellor refuses to cut or freeze SDLT - or worse, introduces sweeping new property taxes - the impact could be severe. Smaller developers may find themselves reliant on short-term finance just to survive. Landlords could see their yields collapse further, making it harder to justify new acquisitions or even hold existing portfolios.

Louis Alexander, CEO of Somo, says:

"Landlords and investors are now contributing far more stamp duty than before. With another budget weeks away, there is real uncertainty about what comes next for their increasingly eroding yields."

How Bridging Finance Can Help

In times of uncertainty, flexibility becomes essential. Bridging finance offers landlords and investors the speed and agility they need to keep deals moving.

"Bridging finance may be what gives landlords and investors the flexibility to keep deals moving despite shifting tax rules," adds Alexander. "When the landscape changes quickly, having access to fast, property-backed finance can make all the difference."

What Happens Next?

The Autumn Budget will reveal whether these proposals become reality or whether the Chancellor opts for a more cautious approach. Either way, landlords and investors need to be prepared for change.

At Somo, we're committed to supporting property professionals through whatever comes next. Our bridging loans are designed to offer the flexibility, speed and reliability you need.

Source: HMRC, HMRC tax and NICs receipts for the UK, 12 months to 31 August 2025

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