UK Budget preview: What to expect in today’s announcement

The UK’s property industry will be watching keenly this afternoon, as chancellor Rachel Reeves looks to close a spending gap of somewhere between £20bn and £30bn in her autumn budget this lunchtime.

Spending cuts and tax rises look set to dominate the announcement, with the chancellor charting a difficult path through sluggish economic growth, rising spending pressures and her own fiscal rules, having floated a variety of potential policies prior to the budget, which is expected at around 12.30pm.

The Office for Budget Responsibility will also publish its updated forecasts alongside the statement, setting out projections for economic growth, borrowing and productivity which will shape the fiscal room available to the government for future tax or spending tweaks.

Despite an earlier plan to increase income tax by 2p, offset by a 2p cut in national insurance, the chancellor is expected to maintain the government’s manifesto pledge not to raise the main rates of income tax, VAT or national insurance.

Instead, the government is preparing to target wealth and high-end property to help plug gaps in the public finances, using possible reforms to inheritance tax.

Changes to property tax which would affect the highest-banded properties in the country – dubbed the mansion tax – will involve revaluing roughly 2.4m homes, a move which it’s predicted could raise around £450m for the treasury.

The changes will impact the prime residential sales market, but opinion is divided among analysts around the net effect of the policy, which could potentially boost supply if owners of under-occupied homes decide to sell, or dampen demand altogether among buyers.

However, any softening of activity in the luxury residential market will surely have an knock-on impact for the construction trade, in a segment that has remained one of the strongest for refurbishment and specialist contractors.

For commercial developers, a planned tourism tax set to be levied on hotels and AirBnb-style accommodation in England could make new hospitality developments less attractive.

For consumers, the soft-drinks levy—commonly known as the sugar tax—is expected to be expanded to cover milk-based drinks and sweetened yoghurts, while other business sectors, including gambling operators and private-hire services, could face additional tax changes.

The budget will be delivered in the House of Commons at lunchtime.