What could Andy Burnham as prime minister mean for your mortgages and house prices?
Andy Burnham is set to take over as prime minister within weeks of Keir Starmer’s resignation.
The former Greater Manchester mayor has gained a reputation as one of Labour’s most interventionist voices on housing, advocating social housing construction, tenant protections and regional investment.
So what does Burnham’s premiership really mean for homeowners, buyers or landlords?
While many of the details remain unclear, housing experts say many areas of particular focus, such as mortgages and the broader housing market, will come under scrutiny.
Mortgage markets move quickly on perception
Before Mr Burnham has a chance to present a single housing policy, financial markets will have already made up their minds.
Swap rates, on which fixed-rate mortgage prices are based, react quickly to local (and global) issues that traders think could influence future interest rate movements in the Bank of England.
Ian Futcher, a financial planner at Quilter, says borrowers need to pay close attention to how investors interpret the new government’s approach to public spending and borrowing.
“A Burnham-led government will be quickly judged by how markets interpret its approach to fiscal discipline, and this will be reflected directly in mortgage pricing,” he says.
Even the perception of looser fiscal policy could keep mortgage costs high, according to Mr. Futcher.
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However, the opposite is also true. A strong adherence to current financial rules could reassure markets and help stabilize borrowing costs, with many lenders including Nationwide, Barclays and Skipton Building Society cutting mortgage rates in the last few weeks.
The key takeaway for homeowners and potential buyers is that policies can affect mortgage rates long before any legislation is enacted.
“Mortgage rates don’t move in isolation,” Mr. Futcher says. “Expectations about the future course of borrowing and inflation are enough to move the markets.”
Experts are encouraging homeowners with a mortgage deal due for renewal to act early to get the best rate possible. You can usually do this six months before the end of your current term, and you can almost always switch later if a better option comes along before switching. But if you wait for the expectation that rates will fall further and vice versa, you will miss out.
Social housing and rental restrictions
Of all policy areas, the one where Burnham’s instincts are perhaps most clearly understood is housing.
During his time in Greater Manchester he advocated for the government to play a more active role in tackling housing shortages, increasing affordable housing and raising standards in the rental sector.
In a speech in Manchester on Monday, Mr Burnham said the “country is in a housing trap” and called for a major “town hall building programme” to be rolled out. Burnham promised that his government would oversee “the largest town hall building program since the post-war period”.
Mr Futcher believes the likely direction of travel under the Burnham government is “greater intervention”, particularly through expanded social housing programs and tighter regulation of the rental market.
“Increasing council housing will aim to address the long-standing lack of supply,” he says, noting that demand for social housing continues to far exceed availability in large parts of the country.
A large-scale construction program could eventually ease pressure on rents and affordability, but he warns it could be years before any benefits emerge.
At the same time, Mr. Futcher warns that policies such as rent controls could change the economics of rental property investing.
“While these measures may provide greater stability for tenants in the short term, there is consistent evidence that tighter regulations could reduce the supply of rental homes by deterring investment,” he says.
Propertymark, the trade body representing property and letting agents, believes Burnham’s records indicate a strong emphasis on increasing housing supply.
“His record as Mayor of Greater Manchester demonstrates a continued focus on increasing housing supply, particularly through social and affordable housing and brownfield-led development,” the organization says.
Propertymark says it would welcome efforts to increase housing delivery but warns further intervention in the private rental sector could be counterproductive.
The organization has consistently opposed rent controls, arguing that they risk “reducing investment, restricting supply and worsening affordability in the long term.”
Instead, it argues that increasing the number of homes built remains the most effective way to increase renters’ affordability and choice.
The group also points to Burnham’s Good Landlord Charter as a potential guide for its national approach. While Propertymark supports efforts to improve standards, it says future accreditation schemes should properly recognize the role of professional letting and management agencies.
Real estate market valuations
For the housing sector, the big question is whether Burnham can strike a balance between greater government intervention and maintaining private sector investment.
Propertymark says the industry will seek “a balanced approach that supports investment, increases supply and delivers better outcomes for consumers across all lifecycles.”
Ultimately, this may be the decisive challenge facing Burnham’s government.
But property prices also play a big role in how influential the wider market is, and these prices could be affected if taxation on land or houses changes.
Mr Burnham has previously talked about introducing a Land Value Tax, but Tim Stvold, tax director at Moore Kingston Smith, said: Finance Times “This type of tax, when implemented, will reduce property values.”
There is little doubt that housing will be high on the political agenda. The harder question is whether further intervention can deliver the homes Britain needs without undermining the investment needed to build them.
