The UK's new prime minister brings a housing agenda that could reshape property taxation, the buy-to-let sector and borrowing costs
Andy Burnham today became the UK's 59th prime minister, succeeding Keir Starmer after winning the Labour leadership with the backing of more than 85% of parliamentary colleagues.
BREAKING: Andy Burnham has been appointed prime minister, Buckingham Palace has confirmed.
— Sky News (@SkyNews) July 20, 2026
The King invited him to form a government and Burnham accepted the invitation.https://t.co/lVdiLrhrDZ pic.twitter.com/UEMZWPiRcB
Burnham, born in Liverpool in 1970, was raised in Cheshire and educated at Roman Catholic state schools before reading English at the University of Cambridge. He was first elected to Parliament in 2001 and went on to serve in the cabinets of Tony Blair and Gordon Brown, rising to health secretary in 2009. After Labour lost power in 2010, he remained an MP, unsuccessfully contesting the Labour leadership in both 2010 and 2015 before leaving Westminster in 2017 to become mayor of Greater Manchester.
He served as mayor from 2017 until his return to national politics in 2026, with a mayoral agenda that spanned transport integration, bus reform, housing, homelessness, policing, skills and regional devolution. His path back to Westminster was engineered through a by-election in Makerfield, which he won in June, having been blocked from an earlier attempt to re-enter Parliament. With no other candidate able to secure the 20% of parliamentary nominations required to mount a challenge, Burnham's leadership of the Labour Party was effectively confirmed without a contest, and he was formally declared leader on 17 July. He takes office today as the UK's seventh prime minister in a decade.
Markets: relief, not confidence
Markets were broadly calm this morning ahead of Burnham's formal appointment, with most of the reaction having already played out over the past week, according to Nigel Green, chief executive of deVere Group. Sterling holds near a 13-month high against the euro and close to $1.35 against the dollar, gilt yields sit at around 4.95% having eased back from a two-month high, and the FTSE 100 trades essentially flat just above 10,500 — with investors having largely priced in Burnham's arrival and rallied on reports that Shabana Mahmood will take the Treasury over Ed Miliband.
That calm, however, should not be misread. "Calm markets this morning tell you nothing about what comes next," Green said. "What we're looking at is relief that the worst-case chancellor did not get appointed, not confidence in the platform Burnham is bringing into Downing Street. Investors and wealthy families need to understand this distinction before they read this stability as a green light."
The earlier turbulence set the context for that relief. When Burnham's candidacy was announced in May, the 10-year gilt yield hit its highest level since 2008 at 5.137%. Speculation that Miliband could be handed the Treasury role then drove yields to an 18-year high on the 10-year and a 28-year high on the 30-year. The retreat to around 4.95% reflects the market's relief at the Mahmood reports rather than any reassessment of the broader fiscal outlook.
The chancellor appointment will matter to markets
Burnham is expected to appoint Mahmood as chancellor when he formally confirms cabinet positions today. According to Green, Mahmood is "viewed as pragmatic and disciplined... and is expected to tear up the fiscal rules that have kept gilts comparatively stable through the uncertainty of a leadership change."
"Markets don't need a radical chancellor right now," Green said. "They need continuity and credibility.
"Sterling didn't rally because investors trust Burnham's fiscal instincts. It rallied because Mahmood was seen as the least damaging option on the table. Strip that relief away and you are left with a prime minister who has refused to rule out a wealth tax, who floated an exit charge on departing wealth just months ago through his own Treasury, and who has spoken for years about taxing capital harder than his predecessors dared.
"Mahmood's reputation has bought Burnham a honeymoon with investors, but honeymoons end the moment a Budget lands. Every signal from his time as mayor and every hint from his own allies points toward a government that will ask wealthy individuals and business owners to pay considerably more, whether through a wealth tax, an exit charge, or a further increase in capital gains tax."
Susannah Streeter, chief investment strategist at Wealth Club, has noted that "sustained elevated gilt yields push up swap rates and, in turn, fixed-rate mortgage pricing," underlining why the chancellor appointment carries more immediate weight for near-term borrowing costs than any single housing policy announcement.
Stamp duty and council tax could be replaced
The most structurally significant component of Burnham's housing agenda is his support for replacing both stamp duty and council tax with a proportional property levy. Modelled on proposals by the Fairer Share campaign group, the scheme would impose an annual charge of 0.48% on a property's current assessed value. Second homes, overseas buyers and empty properties would face a higher rate of 0.96%.
Analysis of the proposals found that the average London homeowner would pay £260 more per year, with the capital collectively bearing £2.5 billion in additional tax. In Kensington and Chelsea, where average values stand at £1.273 million, the annual liability would reach £6,110 — compared with a current council tax bill of £3,287.
Burnham has also been reported to be considering lowering the threshold for the High Value Council Tax Surcharge — the so-called 'mansion tax' — from £2 million to £1.5 million, which could bring an estimated 150,000 additional households into scope.
"The policy implications of a Burnham government extend well beyond a change of leadership, and clients across all segments of the market should be thinking now about what the direction of travel means for their finances," said Joseph Lane, founder and director at Mortgage Lane.
Buy-to-let faces tighter conditions
Burnham has repeatedly called for lower rents and in 2023 wrote to the government requesting powers to impose rent controls in Greater Manchester. Combined with the Renters' Rights Act, which came into force on 1 May, this points to a more interventionist approach to the private rented sector.
During his time as mayor of Greater Manchester, Burnham introduced a Good Landlord Charter and employed enforcement staff to pursue non-compliant landlords. The approach resulted in a 43% rise in financial penalties against landlords, with fines totalling £1.47 million.
Propertymark has warned that further intervention in the private rented sector could be counterproductive, arguing that rent controls risk "reducing investment, constraining supply and worsening long-term affordability".
Brokers with a significant buy-to-let book should be reviewing clients' existing products and stress-testing their positions against a tighter regulatory environment now. The BTL market is not collapsing — but it is sorting.
A large-scale council housebuilding programme
Burnham's housebuilding agenda includes a £40 billion council house programme, which would represent the largest public intervention in housing since the 1970s. Propertymark said his record suggests a continued focus on increasing housing supply, particularly through social and affordable housing and brownfield-led development. The pace of delivery will depend on planning reform and construction capacity.
Industry calls for immediate action
"Monday is not going to be an induction week for Andy Burnham," said Nouran Moustafa, executive financial and mortgage adviser at Roxton Wealth.
"It's going to be a breaking point, whether this Labour government is going to, for one time, not fail the public and not fail the market, or if they are going to carry on the failure from Keir Starmer."
The Bank of England held the base rate at 3.75% at its June meeting, with the next decision due next week. The rate path, and the market credibility of Burnham's opening policy positions, will be the primary near-term drivers for borrowing costs.
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