51乱伦

The property tax trial balloons the government let loose this summer could be back in the air soon.

The reason is the mounting pressure on Chancellor Rachel Reeves, which was evident in her Labour Party Conference speech last week. She set out spending ambitions designed to satisfy her backbenchers while stressing the importance of strict fiscal discipline.

Reeves needs to find between £30 and £50 billion to meet her fiscal rules but faces a so-called trilemma. 

Labour made a manifesto commitment not to increase VAT, income tax or National Insurance - although there are growing questions over whether that promise will hold. Meanwhile, backbenchers have resisted meaningful spending cuts, and the bond market is already uneasy about high levels of government borrowing.

Manchester Mayor Andy Burnham said last week the party had to 鈥済et beyond this thing of being in hock to the bond markets鈥�. The reality of government means the statement is the equivalent of a homeowner no longer wishing to be in hock to their mortgage lender.

On Friday, the Treasury received so-called 鈥榬ound one鈥� forecasts from the Office for Budget Responsibility (OBR), which laid bare the scale of the Chancellor鈥檚 challenge.

A downgraded UK productivity outlook would further increase the pressure to raise taxes in the 26 November Budget - inevitably fuelling even more speculation about property and wealth taxes. I discussed the speculation on a recent episode of with a former Downing Street insider.

Speculation Versus Fact

On this week鈥檚 episode, Carol Lewis, property editor of The Times and Sunday Times, says the trial balloons are likely to continue between now and the Budget due to a long-standing belief that taxes will need to rise.

鈥淭here won鈥檛 be a tax story coming out of Westminster that someone will respond to by saying 鈥榦h, let鈥檚 not cover it,鈥� she said on the . 

Carol also discusses why house price stories in the media can appear contradictory, which articles receive the most clicks, and she offers advice to readers trying to separate speculation from fact.

Meanwhile, financial markets appear unmoved by what they heard at the Labour Conference last week.

鈥淎fter the Budget last year, I wrote 鈥榝iscal headroom is still tiny in historical terms, leaving open the significant risk that Reeves will have to come back for more tax hikes鈥�,鈥� said Michael Brown, an analyst at financial broker Pepperstone.

鈥淎fter the Spring Statement, I wrote, 鈥榯he Chancellor鈥檚 days appear to be numbered, with it being a question of whether a complete loss of market confidence, or manifesto-breaking tax hikes, eventually bring about Reeves鈥檚 demise鈥�. As things stand right now, both of those statements continue to hold water.鈥�

Hesitancy in Prime London 

The pre-Budget uncertainty contributed to average prices in prime central London falling by 3.6% in the year to September, the steepest decline since February 2021.

A mood of hesitation has even now started to permeate the previously robust top-end of the London rental market, as we explore here. 

Meanwhile, there was an increase of 0.1% in prime outer London over the same period in a market driven to a greater extent by buyers who need to move for reasons including education and employment. By contrast, demand in PCL is more discretionary.

The number of exchanges in PCL was down by 10% in Q3 2025 compared to the five-year average (excluding 2020). The equivalent decline was 9% in prime outer London. With prices down by a fifth over the last decade in PCL, the relative value on offer is underpinning demand and means the gap with POL is not bigger, as we explored last week.

However, leading demand indicators were more suppressed in central areas due to the impending Budget. The number of new prospective buyers in PCL was down by 11% over the same period, whereas the equivalent drop was 2% in POL.

Leslie Macleod-Miller, chief executive of Foreign Investors for Britain, said wealthy foreign investors will be closely watching what the government does next. He urged it to introduce an Italian-style flat tax and an investor visa. 

鈥淔ailing to act risks more wealth leaving Britain鈥檚 shores, tax burdens shifting onto ordinary citizens, and growth being generated abroad,鈥� he said.

All of the above is already happening, but November鈥檚 Budget is the Chancellor鈥檚 opportunity to stem the flow.