Why we need to reframe the conversation on tax – Raja

With Chancellor Rachel Reeves facing a £20bn fiscal shortfall, talk of tax changes (or more accurately, increases) has dominated the headlines.

Indeed, since the Budget was scheduled for 26 November, each week has brought fresh speculation: National Insurance potentially applied to rental income, renewed discussions around capital gains and inheritance tax, and even the possibility of stamp duty being replaced by an annual property tax.

Industry reactions to each proposed change have been largely negative, and market sentiment is understandably cautious. Despite the significant revenue the property market contributes to the Treasury each year, it always seems to be the first port of call for governments looking to balance the books.

The impact is easy to see – Rightmove data shows that new buyers were down 5% in September compared to the month before, while the market hasn’t had its usual autumn asking price bounce.

However, amid the headlines and speculation, there is a risk that we are letting short-term uncertainty cloud our long-term judgment.

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Speculation and short-term thinking

This is hardly surprising. A quick glance at newspapers or property and mortgage media provides plenty of reasons to feel cautious about the market.

When potential tax reforms are highlighted, there’s a natural tendency for investors to react quickly, whether by selling assets or delaying acquisitions. Yet these snap decisions, driven by speculation rather than fundamentals, can do more harm than good.

Market sentiment swings wildly around significant fiscal announcements, but history shows that reacting purely to these short-term signals rarely aligns with the long-term direction of the market. For years, we’ve heard grand predictions about the ‘death of buy to let (BTL).’ The Bank of England’s recent rate-hiking cycle is a prime example – it caused genuine stress for landlords, but the mass exodus many predicted never materialised.

For instance, in Q1 this year, the number of BTL loans being issued was 38.6% higher than in 2024, while the total value of loans was up 46.8%. What’s more, in Q2, average rental yields stood at 6.5% – its strongest level in a decade – while demand is still running at over 60% above pre-pandemic levels.

Put simply, when you strip back the speculation, the underlying data nearly always tells a more balanced and resilient story. Investments can’t be defined by headlines or monthly data shifts – their long-term performance should remain central.

Reframing the tax conversation

The current moment is no different. There are periods of adjustment, yet the enduring fundamentals of what makes property a resilient investment remain intact: demand for rental accommodation persists, and well-located properties continue to deliver steady, reliable returns.

Tax policy will ebb and flow alongside political cycles. Each government seeks to leave its mark on fiscal policy, but these shifts rarely rewrite the fundamental logic of the market and strong assets retain their value across decades.

The investors who navigate uncertainty most effectively, therefore, seem to be those who focus on securing properties with the essentials – location, tenant demand, and quality management – rather than reacting to short-term fiscal noise.

What’s more, while an increase in tax does have an obvious knock-on effect on returns in an immediate sense, many investments still deliver long-term gains that outweigh that initial cost. For instance, a 5% rise in tax may feel like a significant hit, but if the asset continues to generate returns of 10%, the net benefit remains positive.

Reframing the conversation in this way brings clarity and confidence. It encourages investors to look beyond speculation and focus on building resilient portfolios that can adapt and thrive, no matter what the next policy shift might be.

Restoring certainty

In this sense, specialist lenders have a great deal of responsibility. By offering tailored products, transparent communication, and the ability to provide finance at pace, lenders can ensure that brokers and landlords access the funding they need without unnecessary friction.

As the market waits to see what the Autumn Budget ultimately delivers, the focus must remain on removing the barriers investors and brokers often face.

In doing so, they are better equipped to make confident, well-informed decisions that will stand them in good stead over the long term – no matter what short-term challenges arise along the way.