The Chancellor’s latest Budget arrives at a time when clarity and stability are needed most. After several months of speculation surrounding possible property tax changes, the confirmation of the Government’s plans provides welcome certainty for homeowners and buyers across the City of Westminster.
At Tuckerman Residential, we have reviewed the detail of the Budget alongside long term market evidence drawn from LonRes, whose data set provides an exceptionally detailed picture of the Westminster market. Taken together, the outlook for Pimlico, Old Westminster and the wider SW1 area is one of reassurance and renewed confidence.
Reassurance for Homes Above £500,000
One of the most significant concerns in recent weeks has been the suggestion of a new annual property tax for homes valued above £500,000. Given the price profile of Pimlico and Westminster, this rumour created understandable hesitation.
The Government has now confirmed that no such annual tax will be introduced. This immediately removes a major source of uncertainty and should help unlock activity as we move into early 2026.
The High Value Supplement: Modest in Scale and Manageable in Practice
The only new property related measure is the Council Tax High Value Supplement, applied to homes valued above £2,000,000.
For homeowners in Westminster, the threshold is relevant because a considerable proportion of local property now sits within or above this range. However, the cost of the supplement is modest, approximately £2,500 a year for a £2m home and increasing gradually for higher values.
Guidance on these measures and how properties will be banded can be found here on the government website.
In practical terms, this is a small addition to the annual running costs of owning a £2m to £3m property in SW1. It sits alongside service charges, building insurance and maintenance. It is noticeable but far from transformative.
It is certainly not comparable to stamp duty, which remains the dominant financial consideration for buyers in this price bracket and the clearest influence on negotiation strategy.
How Many Homes Will Be Affected in Westminster
Using long term transaction patterns and typical turnover rates for prime central London, we estimate that:
Around 12,000 to 15,000 homes in the City of Westminster are valued above £2m and therefore likely to fall within the scope of the new supplement.
This means the measure is locally significant, but because the annual cost is relatively small, it is expected to shape tactics rather than values.
Understanding the £2m to £3m Market in SW1
Over the past thirty years, Westminster has seen one of the strongest and most consistent evolutions in the United Kingdom property market. Annual transactions above £2m have risen dramatically, typically ranging between 900 and 1,100 per year over much of the last decade.
Pimlico and Old Westminster form an important part of this market, offering:
• Larger lateral flats in garden squares
• Freehold houses around Vincent Square, Smith Square and the Pimlico Garden Squares
• Mansion block apartments popular with international buyers
• Well proportioned period homes that attract long term domestic purchasers
The depth and resilience of demand provide a strong foundation that has historically absorbed policy changes with minimal long term effect.
What We Expect Around the £2m Threshold
Based on Westminster’s past responses to fiscal adjustments, the effects around the new £2m threshold are likely to be subtle and short lived.
1. Tactical pricing
Some sellers of £2m adjacent properties may choose to list at £1.95m to £1.99m. This is typical behaviour whenever a new band is introduced.
2. Slight negotiation adjustments
Buyers may reference the supplement in negotiation, but at £2,500 to £3,500 annually, its impact is marginal. Most discussions will continue to centre on stamp duty, which remains by far the larger cost.
3. No long term impact on values
For homes clearly above £2.3m, particularly best in class addresses in Pimlico and Old Westminster, we do not expect the supplement to influence pricing or demand.
4. Quick normalisation of activity
As with all previous tax changes, the market typically pauses while the details settle, then resumes at normal levels within a matter of months.
Wider Commentary From Market Observers
The measured nature of the Budget has been noted by several independent analysts. Ashley Webb, UK economist at Capital Economics, commented that the new surcharge on higher value homes “may be only a modest drag on activity and prices at the top end of the housing market.”
Consumer facing reporting has also stressed the narrow scope of the measure. The Yorkshire Post recently observed that “most UK homeowners will not be affected, as the vast majority of properties fall well below the threshold.”
From a broader fiscal perspective, the Financial Times described the Budget’s approach, including the levy on expensive homes, as part of a package that raises the overall tax burden but does so in a way that avoids sharp shocks, framing the Government’s stance as “spend now, pay later” in its post Budget analysis.
These perspectives align with what we are seeing locally at Tuckerman Residential. Clarity and predictability are the most valuable outcomes for the market at this stage, and this Budget largely delivers both.
Stamp Duty: Still the Most Influential Factor
Stamp Duty Land Tax remains unchanged in this Budget. While the stability is welcome, the existing thresholds, set in 2014, continue to exert far greater influence on buyer affordability and negotiation strategy than any annual levy.
For buyers in Westminster and Pimlico, stamp duty remains the most significant financial consideration at the point of purchase.
Our View: A Market Ready to Move Forward
The combination of clarity, modest policy changes and strong long term fundamentals means the outlook for Westminster and Pimlico is encouraging.
We believe
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Confidence will return quickly now the threat of a broad £500,000 annual tax has been removed.
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The new £2m supplement is unlikely to affect long term values, especially for prime and best in class homes.
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With an estimated 12,000 to 15,000 properties falling above the threshold, the measure is locally relevant but the cost is marginal.
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Westminster remains one of the most resilient and internationally supported markets in the United Kingdom.
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Buyers and sellers can step back into the market with clarity and confidence.
At Tuckerman Residential, our advice is straightforward. This is a sensible moment to re engage with your move, your sale or your search. With clarity restored, the market can begin to operate with normal rhythm once again.
