Prior had anticipated a restrained Budget and got one. The government had been explicit in its pre-Budget messaging – no kite flying, no dramatic reforms – and it delivered. The absence of shocks provided a degree of reassurance, but Prior is careful to separate short-term calm from genuine certainty.
“They promised a no-frills budget, and they delivered a no-frills budget,” he said. “The fact that there are no surprises means that there is some semblance of stability. But there is longer-term uncertainty, which has an impact on confidence because of these ideas that haven’t been fully mothballed or cancelled but have been just put in a holding pattern.”
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Landlords face a ‘double downing’
The Budget’s most direct impact came through an increased tax burden on landlords – what Prior describes as a “double downing” on a sector already under significant strain. Rental income tax rates were confirmed as rising to 24% for basic-rate taxpayers, up from the previously anticipated 22% – a move that, combined with the Renters’ Rights Act’s removal of Section 21 no-fault evictions and elevated borrowing costs, is reshaping the investment case for buy-to-let, particularly among smaller and more leveraged landlords.
Stamp duty changes have already drained an estimated £541 million from the market since the 2024 Budget, according to Knight Frank, using data from the Land Registry and LonRes – illustrating how swiftly tax policy shifts can reshape investor behaviour.
