SIR Keir Starmer resigning has “added yet another degree of uncertainty in an already volatile housing market” as experts urge his expected successor Andy Burnham to abolish stamp duty.
Starmer announced his resignation this morning in a statement outside 10 Downing Street – he said every decision he has made in office has been about “putting the country I love first”.
He will remain in post until Labour chooses a new leader, which he’s asked the party’s governing body to ensure happens “before Parliament returns in September”.
Burnham is widely expected to replace Starmer as Labour’s new leader after becoming the Member of Parliament for Makerfield last week.
The Pound has fallen to $1.32, its lowest level against the US Dollar since November 2025, and €1.15, its lowest level against the Euro since February this year.
The FTSE 100 has held flat so far while Government bond yields are stable for now – suggesting that markets don’t anticipate an immediate fiscal collapse.
Property experts warned that the mortgage price reductions in recent weeks could slow down due to the uncertainty sparked by Starmer’s resignation.
It could inject a degree of political uncertainty into financial markets
Riz Malik, Independent Financial Adviser at Southend-on-Sea-based R3 Wealth, said Burnham can help the housing market by abolishing stamp duty.
He added: “If Burnham comes in and sets out a timetable for stamp duty reformation, then the housing market may be reignited. Without this, he carries a greater risk that a negative bond market reaction could impact mortgage pricing.”
Richard Davidson, Mortgage Advisor at onlinemortgageadvisor.co.uk, said it’s too early to know how it will affect the housing market.
He added: “A change of Prime Minister grabs the headlines, but it doesn’t change anyone’s monthly mortgage payment overnight. What actually moves rates is whether the markets stay calm during the handover, and the early signs are that everyone in the running has learned the lesson of 2022 and won’t go near an unfunded budget that spooks lenders.
“The base rate held at 3.75% last week and fixed deals have been slowly edging down, so an orderly transition should keep that gentle downward path on track. My advice to anyone buying or remortgaging is don’t sit on your hands waiting for political certainty, because it almost never arrives, line your deal up now and you can usually switch if something better lands before you complete.”
Doug Miller, Director at Bath-based Lansdown Financial Services, said mortgage pricing could be affected.
He added: “A resignation by the Prime Minister could inject a degree of political uncertainty into financial markets, which can feed through to mortgage pricing. In the short term, swap rates could become more volatile as markets reassess the outlook for fiscal policy, government borrowing and the timing of future Bank of England rate cuts.
“That said, any sustained increase in mortgage costs would depend on whether the political change materially alters expectations for inflation, public finances or interest rates. If markets view the transition as orderly and policy continuity is maintained, the impact on borrowing costs may prove limited.
“Unfortunately this adds yet another degree of uncertainty in an already volatile market. But with many banks announcing multiple interest rate reductions in recent weeks, the outlook is certainly not all doom and gloom at the moment.”
This adds yet another degree of uncertainty in an already volatile market
Aaron Strutt, Product and Communications Director at London-based Trinity Financial, said he expects mortgage price reductions in recent weeks to slow down.
He added: “While many people seem to be very pleased Sir Keir has gone, there is no doubt that it does mean more instability to the UK economy. Sterling has remained relatively strong against the Euro over the past few months despite the challenge to his leadership, but there are now serious risks to sterling exchange rates.
“Mortgage rates have been coming down for weeks, but these price reductions could slow down. There are no guarantees that a new prime minister will do a better job.”
Elliott Culley, Director at Hayling Island-based Switch Mortgage Finance, said the housing market needs more stability.
He added: “For the housing market to recover and grow it requires stability and steadiness governing the UK. This seems almost impossible right now as another prime minister fails to last the full term.
“Markets always act cautiously to change and an increase in swap rates and gilts would be expected, just as they had started to fall.”
The uncertainty over the next few months may result in fluctuating mortgage rates
Justin Moy, Managing Director at Chelmsford-based EHF Mortgages, said who Burnham chooses as Chancellor will be pivotal.
He added: “Whoever eventually takes residence at Number 10 will probably have limited impact on housing. The eyes need to be on who will take Number 11, as the Chancellor will have the greatest say in the housing market from this point on.
“The uncertainty over the next few months may result in fluctuating mortgage rates and markets generally, until the new tenants of Downing Street set their direction. Confidence will lower rates and drive homebuilding, otherwise we will be in a political mess once again.”
