Pre-Budget Outlook 2025: What Should South London Landlords Watch Out For?

With the long-awaited Autumn Budget now just days away, uncertainty is running rife and the rumour mill seems to be spinning faster than ever.

Political U-turns, government mixed messaging and a number of jittery market reactions have left most people – including the so-called ‘experts’ – wondering what the Chancellor will announce next week. From our point of view as local lettings and property management agents in South London, the question is how it will affect the homes they own and let out.

Here at Your Home Managed in Streatham Hill, covering lettings across South West London, we know that both landlords and tenants alike are asking the same question:

“What’s coming – and what will it mean for the private rented sector?” 

Rather than speculate on all the changes that could be coming, let’s focus on what matters most to the people we look after: lettings, compliance, and the day-to-day realities for the Private Rented Sector (PRS) in London.

Read on for our lettings-focused review of the economic backdrop shaping this year’s Budget, plus the potential policy areas we think South London landlords should keep a close eye on next Wednesday.

The Economic Backdrop

Growth: Weak

GDP is barely moving, rising only 0.1% last quarter. General confidence is fragile, and this is a sentiment that feeds into the lettings market. Many landlords are delaying non-vital refurbishments and have held off on new investments, waiting for the dust to settle – although we are learning that there is a generational divide, with younger investors proving less risk-averse. Millennials now make up half of shareholders in new buy-to-let company formations.

Employment: Softening

Unemployment has crept up to 4.8%. Demand for rentals remains strong in South London, but job security naturally affects tenant affordability, so if this trend continues it is something that could seep into the rental market.

Inflation: Sticky but Easing

Inflation has dipped slightly to around 3.6%, having held at 3.8% since July. That is at least a little bit of good news, but it is nevertheless still above the Bank of England’s 2% target.

Interest Rates: Holding at 4%… but cuts expected

A Reuters poll of market analysts has revealed a consensus view, expecting a rate cut in December and a further cut during the first quarter of 2026 – something that has become more likely following the recent dip in inflation.

Mortgage lenders may act to cut their own product rates in advance, now the direction of travel seems this likely. Nevertheless, for the time being we are seeing:

• SVRs around 7%+
• Fixed rates around 5%

Rental Market Snapshot in South West London

While sales prices have wobbled across London, still in a negative position over 12 months in most boroughs, rents have continued rising, driven in large part by a chronic shortage of rental homes.

Across locations such as Streatham, Balham, Tooting and Colliers Wood, we’re still seeing:

• High tenant demand
• Low stock levels
• Multiple enquiries per listing
• Limited void periods

The market remains strong – but Budget announcements could alter the status quo, and landlords are rightly concerned about what might lie ahead next week.

Seven Potential Measures South London Landlords Should Watch Out for in the Autumn Budget 2025

1. Stamp Duty Reform 

Rumours include:

• Abolishing SDLT entirely
• Switching SDLT from buyers to sellers
• Phased payments rather than upfront
• A new annual property tax on higher-value homes

If SDLT changes make buying easier and less expensive, tenants who have long harboured a desire to purchase rather than rent could find themselves in a position to do so.

Of course, even if stamp duty is abolished or for some reason reduced for buyers, the likelihood is that the levies exacted on second home purchases will remain, and potentially become greater.

2. Council Tax Rebanding

Council tax bands still use 1991 values, and there is a widespread expectation that these could finally be updated in the Autumn Budget 2025.

There are several implications in this for South London landlords:

• Homes modernised or extended since the 90s may well jump up a band or two if large-scale reassessment takes place, with the burden falling on households (i.e. tenants) already stretched
• Empty homes, second homes and short lets (such as Airbnb) may be targeted

3. Capital Gains Tax 

We have seen some speculation that CGT allowance could be reduced, and that tax levels might rise.

There is also speculation around a potential CGT charge on gains on primary residences over £1.5m.

This would not affect most South London landlords directly, but there are situations we see where landlords move into a rental property they own, taking it as their main residence for a period before selling.

It could be a means to stop this practice.

This change is felt to be less likely than others to come through – so for the time being, one to watch, but not to panic over.

4. Income Tax, National Insurance & VAT – Landlords’ Big One

If the Chancellor avoids raising income tax directly, we may see changes such as:

• Frozen tax thresholds (fiscal drag)
• Higher VAT on goods/services (impacting refurb costs)
• National Insurance on rental income

That last one is the headline as far as the lettings market is concerned.

If NI is applied to rental income, the implications are that:

• around 360,000 landlords nationally could be affected
• yields could fall by up to 10% for many landlords
• we may see more “accidental landlords” or older landlords exit the sector

In South London, where margins for many landlords have already become that much tighter due to increasing mortgage rates and other rising costs, this is something that could have a real impact.

5. Inheritance Tax & Wealth-Based Property Measures

Possible measures include:

• Lower IHT thresholds
• Higher tax rates
• Wealth-based levies on property portfolios
• Some sort of ‘mansion tax’ on the sale of high value homes

Landlords with multiple properties, or with larger homes held long-term in family ownership, should certainly keep an eye on any announcements relating to inheritance or wealth taxes.

6. Renters’ Rights, Compliance & PRS Regulation

Even without the Budget, landlords are already adjusting to:

• The Renters’ Rights Act and what it means (see our recent article here for more information)
• Increased compliance requirements
• Changes to mandatory reporting (including Making Tax Digital – see our previous article here)
• Pressure to make green improvements

The Budget could bring:

• Stiffer EPC requirements
• Incentives for insulation or heat pumps
• Additional compliance tied to rent increases or evictions

Any additional regulation, layered on top of high mortgage costs, may push more landlords to consider exiting – and so some sort of sweetener, such as those possible incentives for landlords to make green improvements, seem likely as a measure to persuade wavering landlords to stay in the market.

7. Mortgage Market Support for First-Time-Buyers

There is some expectation that measures will be tweaked, strengthened, reintroduced or brought in as new, aimed at helping people get on the property ladder. Possibilities include:

• Support for low-deposit mortgages
• Help to Buy-style schemes
• Relaxing of affordability tests
• Mortgage guarantee schemes or extensions to existing schemes

Of course, anything that creates more first-time-buyers is typically seen as a good thing, but it would mean tenants leaving the rental market behind. That could cause greater void periods for landlords. It isn’t an unreasonable concern; however, demand for rentals is so high in South London, it is unlikely to greatly prejudice landlords here.

Measures the Lettings Industry is calling for

The above, so far, highlights key points that market commentators have discussed and suggested as possibilities, and represent some of the areas we think could most affect landlords in South London.

On top of that, however, lettings industry bodies and indeed letting agents themselves have been urging the Chancellor to introduce concrete support to address acute pressures facing the private rented sector.

Key calls include uprating Local Housing Allowance (LHA) to better reflect current market rents, enabling more low-income tenants to secure private lets and reducing rent arrears.

Many are also seeking reform of Universal Credit – especially changes to the five-week wait and payment mechanisms – to prevent arrears and ensure smoother tenancies.

Another priority is reinstating mortgage interest tax relief for individual landlords, which would help mitigate increased costs and stem the flow of properties leaving the sector. There is also widespread demand for direct support or incentives – such as reviving the Landlord Energy Saving Allowance – to encourage energy efficiency improvements and help properties meet upcoming minimum EPC standards

More broadly, letting professionals argue that targeted measures to ease compliance costs and boost supply are essential to stabilise rents and maintain a healthy, accessible private rented sector for both tenants and landlords.

Final Thoughts: What Does the Autumn Budget 2025 Mean for Landlords?

The only real certainty seems to be more uncertainty.

Nevertheless, whatever does happen next Wednesday, Your Home Managed will break it down for you clearly and practically to ensure you understand what has changed and how it affects you here in South London.

Despite anxieties, the South London rental market remains strong, undersupplied and resilient.

It is a market driven by demand from professionals, families and long-term renters

We will get to work on a full post-Budget breakdown as soon as the Chancellor sits back down on the front bench.

If you need help understanding what it all means for your property or portfolio, we are here to talk through your options.