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Here’s a look at what’s changing, and how it could filter down to buyers, sellers and landlords in Telford and across Shropshire over the next few years.

Mansion tax - who’s actually affected?

In simple terms, this is an annual council tax surcharge on homes in England worth more than £2 million. It kicks in from April 2028 and will be charged in bands, starting at £2,500 a year for homes between £2 million and £2.5 million, rising to £7,500 a year for properties worth £5 million or more. (The Guardian)

Realistically, this isn’t going to apply to many of you. Current estimates suggest it will hit around 0.5% of UK properties, with the bulk of those in London and the South East. (Zoopla)

For most buyers and sellers in Shropshire, this will be something you read about in the news rather than feel directly. But it still matters in a couple of ways:

  • It may cool the very top end of the market in London and prime areas, which could have a knock-on effect on high-value chains and cash buyers who are funding a move out of the capital.

  • It sets a direction of travel - higher ongoing taxes on more expensive homes, rather than big one-off hits like stamp duty changes.

Landlord tax - what’s changing for rental income?

The main takeaway from the budget for many of our clients is the landlord tax changes. Yep - they’re coming after landlords again. 

From April 2027, landlords will have their own set of tax rates for property income. Instead of being taxed at the standard income tax bands, rental income will be subject to specific rates of 22% (basic), 42% (higher) and 47% (additional). Finance costs like mortgage interest will be relieved via a 22% tax credit. (LLP Site)

On top of that, the Budget confirmed that taxes on property, dividend and savings income will rise by 2p in the pound, on the basis that these currently don’t carry National Insurance in the way salary does. (GOV.UK)

The government says most people with small amounts of property income will be protected by allowances…but for anyone with a portfolio, or a single but highly leveraged property, the overall message is pretty simple: expect to pay more tax on rental profits over the coming years.

What might that mean for the rental market locally?

There are three likely knock-on effects for areas like Telford and the wider Shropshire market:

  1. Some landlords may decide to sell
    We already have a lot of nervous landlords, following the Renters Right Bill. For landlords who were already on the fence - perhaps with older properties needing upgrades, or with tighter margins due to higher mortgage rates,  the combination of extra tax and existing costs might end up being the nudge that pushes them to exit the market.

  2. Others may try to pass the cost on through higher rents
    Don’t panic - not every landlord can or will do this, but in a market where demand for rental property is strong, some will naturally look to adjust rents to reflect higher tax and financing costs. If supply shrinks and demand stays high, that pressure on rents can build.

What about buyers and sellers?

One thing that didn’t happen in this Budget is also important: there were no big changes to Stamp Duty. That will be a relief to many would-be movers who had paused plans while rumours of wide-ranging reforms were flying around. (Propertymark)

For buyers:

  • The lack of Stamp Duty changes, combined with slowly easing mortgage rates, should improve confidence. People generally feel more comfortable moving when the rules aren’t changing every five minutes. Which makes sense.

  • The mansion tax is unlikely to touch most local buyers, but it does underline that the government is looking more closely at wealth tied up in property. That might influence how some higher-end buyers structure their finances or where they choose to buy.

For sellers:

  • A more settled tax environment tends to be good news. If first-time buyers and movers can see what their costs look like for the next couple of years, they’re more willing to commit.

  • If landlord tax changes do encourage some investors to sell, that could mean more stock coming onto the market in certain price brackets. In some areas, that will help ease the shortage of good quality family homes to buy.

So, is this Budget good or bad for the market?

Like most Budgets, it’s a bit of a mixed bag.

For everyday homebuyers and sellers in Shropshire, the overall feel is one of cautious stability. No big changes to Stamp Duty, a clear but targeted mansion tax that hits only the very top end, and a sense that the government wants to raise more from property without pulling the rug from under the whole market.

For landlords, the picture is tougher. Higher tax on property income and changes to how finance costs are relieved will squeeze some margins and may prompt a rethink of portfolios, especially where properties are underperforming or need significant work.

From a local point of view, we’d sum it up like this:

  • If you’re thinking of moving, this Budget probably won’t stop you and might even give you a bit more confidence that the rules are settling down.

  • If you’re a landlord, now is the time to run the numbers, talk to your accountant and decide whether to hold, improve or sell.

  • If you’re an investor looking at Shropshire as a long-term bet, the fundamentals of the area still look solid, even if the tax environment is tightening.

If you’d like to chat through how any of these changes might affect your plans to buy, sell or let, we’re always happy to talk it through in plain English and look at what makes sense for you and your property.