The Autumn Budget was thrown into turmoil after the Office for Budget Responsibility mistakenly published its economic and fiscal risks report, setting out in detail the Chancellor’s tax plans and long-term forecasts.

The document confirms that the government will raise £26 billion through a series of measures that will push the overall tax burden to a record 38 per cent of GDP by 2031.

Central to the package is a three-year freeze in income tax thresholds, projected to raise £8 billion, alongside a £4.7 billion increase in revenue from tighter rules on pension contributions by both employers and employees.

The leak is likely to spark political backlash as well as anxiety across the housing market, where uncertainty around property-related tax changes has already dampened activity.

Analysts warned that the emerging fiscal strategy risks extending the slowdown in transactions, particularly in higher-value segments where buyers have been anticipating potential changes to property taxation. Market data already points to a more cautious environment ahead of today’s statement.

RISKY MOVE

Following the OBR Report confirming Mansion Tax on homes over £2m, Nick Sanderson, Audley Group CEO, said: “Opting to play with taxes at the top of the housing market is inherently risky.

“The top of the ladder is often the driver of market movement and the new mansion tax will undoubtedly put the brakes on.

“Larger family homes become immediately less appealing to prospective buyers, particularly in areas where house prices have grown significantly like the South East.

“The government had an opportunity to get the housing market functioning as intended. Instead, it has introduced counterproductive barriers which will lock up valuable housing stock, reduce transactions and put yet more pressure on the housing market.”

YEARS OF UNCERTAINTY

Tom Bill, head of UK residential research at Knight Frank, said: “Until the revaluations take place, buyers and sellers face years of uncertainty, especially around the £2 million threshold. Even once completed, new valuations can be challenged, which would prolong the limbo.

“The policy may also raise less than expected, especially because it is deferrable. If opposition parties say they would scrap it, many homeowners will look at the opinion polls and wait it out. When you factor in the cost of carrying out the valuation and the potential lost stamp duty revenue from a stickier market, the sums raised could look like a rounding error for the Treasury.”

MANSION TAX

And he added: “More properties will inevitably get dragged into the mansion tax net, which means the proportion of terraced houses, flats and semi-detached homes will grow over the years, particularly in the capital. The term ‘mansion tax’ will increasingly feel like a misnomer.

“Overall, it feels like politics has trumped economics. One the one hand, the policy is designed to keep backbenchers happy and ensure the near-term survival of the Chancellor and Prime Minister.

“On the other, it throws a spanner into the works of the housing market for not much money in return, which is important in the context of a Budget where spending is front-loaded. The UK already pays the highest percentage of property taxes among OECD countries.”

MARKET CATALYST

Stuart Bailey, head of super prime London sales at Knight Frank, added: “In just over 24 hours prior to the Budget, our London teams exchanged on £90m of property, far exceeding an average Tuesday.

“Speculation around anticipated tax changes has acted as a catalyst for the market in recent weeks, across all levels of the housing ladder.

“Whilst some buyers and sellers have wanted to get ahead of the Budget, others are waiting to see, and we will likely experience some renewed activity immediately post Budget too.”