The seemingly never-ending run-up to the Budget finally ended on 26 November, having been replaced with the even longer run-up to the tax and spending changes we’ll live through over the coming years.

My colleague Marcus Dixon already unpicked what’s relevant for housing in his newsletter right after the Budget. He wrote:

With the Budget concluded and no major fiscal events planned for a year, greater certainty should help restart market activity. If markets continue responding positively, we could see rates drop more rapidly, easing debt cost burdens across the sector. But to fulfil the government’s ambition of building 1.5 million homes we’ll need to see more on increasing delivery, improving viability, and demonstrating clear and sustained demand for homes across all sectors of the UK housing market.

What does this mean for Living specifically? Broadly speaking, it will still operate within a wider market characterised by supply constraints and hurdles for mobility. The High Value Council Tax Surcharge on homes valued at over £2m from 2028 might create some incentive for older homeowners to downsize and, therefore, move into retirement housing, but the impact is likely to be minimal.

A bigger impact could be further pressure on rents across UK PRS, including BTR. Property income tax rates will increase by two percentage points from April 2027. Basic rate taxpayers will pay 22 per cent, higher rate 42 per cent, and additional rate 47 per cent. The risk is that this will give smaller landlords a further incentive to exit the market, reducing supply and potentially increasing rents.

Our rental growth forecasts – updated after the Budget – reflect that pressure. Rents are set to normalise after several years of historically high growth, but we expect them to accelerate a bit in the second half of the forecast period. Despite falling relative to recent years, rental growth is set to rise faster than wages and inflation.

It wasn’t just Budget speculation that the government put to rest on 26 November; there was also clarity on an international student levy in England first proposed in the immigration white paper in May this year.

At the time, there was no set methodology for what universities would have to pay, but we now know what the intention is. In a technical consultation published after the Budget, the government proposed that universities would be charged a flat fee of £925 per international student from August 2028, with an allowance that means universities pay nothing for the first 220.

This does a few things. First, it places much of the burden on a small handful of universities. If student numbers in 2028 matched the latest figures we have from 2023/24 (from HESA), the 10 institutions with the largest overseas student populations would account for more than a quarter of the £537m this levy would raise. Russell Group universities would account for 36 per cent.

Second, it shields smaller universities from the fee – more than a third of institutions with some international students fall under the 220 threshold.

Third, universities – 45 per cent of whom are facing a deficit this year, according to a new report from the Office for Students – will have to pass the cost on to students, though we don’t yet know how they will choose to do this. Although the prospect of an additional fee would be, in many cases, outweighed by other benefits of studying in the UK, it might shift where overseas students choose to study to get the most perceived value for money. Wales and Scotland, where the fee won’t apply, might start to look particularly attractive.

Finally, a sneak peek at our quarterly investment volumes – something we don’t normally do. But it hasn’t been a normal quarter, at least not for healthcare, as you can see from this striking chart.

What happened in Q4 wasn’t, in fact, a misplaced decimal point; it was a tidal wave of US capital. Most prominently, Welltower has made (at the time of writing) five acquisitions in the UK this quarter alone, the largest of which being Barchester Healthcare for £5.2bn.

Why is this happening? In a market blighted by discounts to net asset value, American healthcare REITs are bucking the trend with strong premiums to NAV. Welltower, now the world’s largest REIT, is in a class of its own at an estimated 145 per cent premium, according to Green Street.

That gives it a low cost of capital, an incentive to invest and an advantage over others in the UK and Europe who are constrained by NAV discounts and difficulties raising capital. With that in mind, why wouldn’t Welltower do a bit of shopping before Christmas?

I will leave it at that for now, but watch this space in January when we return with our full-year investment figures. Until then, enjoy the holiday season and we will see you in the new year.