UK property stocks slid Tuesday after bond yields rose on fears about the country’s long-term financial health.

The FTSE 350 UK Real Estate Index fell 3.6%, compared to a 1% fall in the broader FTSE 350 Index, as yields on UK 30-year government bonds rose to a record high on Tuesday.

That rise in bond yields was driven by worries that at the next budget, the government will have to cut spending or raise taxes, perhaps both, to plug a black hole that could be as high as £35B, Bloomberg estimated.

With the budget scheduled for the beginning of November and speculation high about which policies the government might roll out to increase its tax take, the rise in bond yields is likely to be something investors have to contend with for at least the next couple of months.

Higher bond yields mean higher borrowing costs for real estate investors, and they decrease the attraction of purchasing real estate — buying a building at a 4.5% yield isn’t appealing when investors can buy a government bond and make the same return with none of the hassle and illiquidity.

Shares in retail owner Hammerson led the drop, falling 5%. London office REIT Great Portland Estates fell 4.5%, residential owner Grainger fell 4%, and diversified REITs Landsec, British Land and Segro all fell around 4%.

The FTSE 350 Real Estate Index has fallen 18% over the past 12 months.