Sir Keir Starmer’s resignation will not automatically cause house prices to fall or mortgage rates to rise, but it will inject another dose of uncertainty into the UK property market.
Sir Keir Starmer’s resignation will not automatically cause house prices to fall or mortgage rates to rise, but it will inject another dose of uncertainty into the UK property market.
The interest thing to see will be how financial markets judge the economic policies of the next Prime Minister and Chancellor.
Mortgage lenders price many fixed-rate deals using swap rates, which reflect expectations about future interest rates. If investors become concerned that a new government will borrow and spend significantly more, gilt yields and swap rates could rise. That would make it harder for lenders to reduce mortgage rates and could even push some deals upwards.
It is too early to say what impact, if any, yesterday’s announcement will have on the property market here in Gloucester. However, buyers and sellers dislike uncertainty, particularly when it involves taxation, borrowing, and mortgage costs. Some households may pause until the leadership contest and future economic direction become clearer.
An Andy Burnham government could also bring longer-term changes to property taxation. He has previously supported reforming council tax and stamp duty, potentially replacing them with an annual tax linked to property values.
Scrapping stamp duty could encourage more people to move and improve mobility within the property market. However, an annual property levy could increase costs for some homeowners, landlords and owners of more expensive homes.
If Andy Burnham place as PM is challenged then a prolonged contest does put the property market at risk of entering a holding pattern as for those at the top of the chain, where purchases are more discretionary, confidence is everything.
The UK property market as a whole has shown plenty of resilience and it is likely that this will continue as serious buyers will continue buying, and motivated sellers will continue selling.
As seen at the back end of 2025, speculation can however bring everything to a standstill and it remains to be seen whether a government, on the back foot already, can seriously try to bring about major change with a general election already on the horizon.
We love to hear your thoughts and comments and welcome any questions you have on this or any other property related matter.
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