Mortgage adviser says stamp duty uncertainty and base rate policy are paralysing buyers ahead of Monday's new government
Andy Burnham faces the toughest political challenge of any leader in the past decade, and the mortgage market is already feeling it.
Nouran Moustafa (pictured top), executive financial and mortgage adviser at Roxton Wealth, told Mortgage Introducer the incoming prime minister's first decisions in office will determine whether borrower confidence recovers or deteriorates further. Burnham was confirmed as Labour leader on Friday and is set to take office on Monday, succeeding Sir Keir Starmer as the UK's seventh prime minister in a decade.
Moustafa said the political transition was creating tangible hesitation among buyers and Burnham has no room for a cautious start.
"Monday is not going to be an induction week for Andy Burnham," she said. "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."
Stamp duty uncertainty is stalling decisions
At the centre of that hesitation, Moustafa said, is confusion over what Burnham intends to do with stamp duty. He has previously backed replacing both stamp duty and council tax with a proportional property levy, but no formal policy has been confirmed. That ambiguity, Moustafa argued, was already disrupting the purchase market.
"People are putting offers on houses and being like, is he going to scrap stamp duty?" she said. "And then other people who have worked so hard to buy nice houses in London are now wondering if he decides to scrap stamp duty, which we have already paid, and now he decides to do the percentage of the house value proposition, what are we going to do?"
Her prescription was direct. Burnham should move immediately to kill speculation, reverse the stamp duty changes introduced under the previous administration, and ease thresholds for first-time buyers to get the housing market moving.
"He needs to scrap the rumour of scrapping it, and on the other side he needs to take a U-turn on whatever Reeves and her failure of a prime minister did on stamp duty, return it back to the previous rules, ease the rules for first-time buyers, and get the housing market moving."
The Bank of England held the base rate at 3.75% at its June meeting, with the next decision due on 30 July. Moustafa said she expected the rate to hold again, but argued the real problem is political pressure on the Monetary Policy Committee, pressure she wants Burnham to remove. With tracker mortgage demand already rising as the base rate outlook shifts, broker sentiment around rate direction has rarely been more divided.
"He needs to relieve whatever restrictions and whatever pressures the current government has had on the Bank of England and let them change the base rate to match the inflation and let them take the right economic decision," she said. "Taking the right economic decisions will then reflect on the markets and then lenders will have better pricing."
The self-employed are caught in the middle
Beyond the immediate question of rates and stamp duty, Moustafa pointed to a structural contradiction at the heart of the UK lending market – one that is hitting harder-working borrowers the most.
"There is the saying where you can't see the chocolate in your hand and also eat the chocolate at the same time, that is the lending market right now," she said. "If you work two, three jobs, or if you're self-employed, if you work all day every day and you can afford the stamp duty and deposit in London, a mortgage is probably going to be so hard unless you go off high street. If you are working and you can't afford the stamp duty and the deposit, then you are ineligible for a mortgage."
The observation cuts to a familiar tension for brokers working with self-employed clients. Research has found four in five self-employed individuals have struggled to obtain a home loan, with strict lending criteria limiting their options despite the sector holding an estimated £81.5 billion in disposable wealth. Moustafa said the new chancellor's immediate priority should be to cut the benefits bill, get Britain working, and release the Bank of England from political interference – a sequence she described as non-negotiable.
"The immediate priority right now should be to cut down the benefits, get Britain working again, and release the pressure from the Bank of England."
Moustafa said borrower confidence was suffering not from a lack of information but from a lack of political certainty. For mortgage professionals, the new government's impact on the lending market has rarely felt more immediate. She said the market is not waiting for a long-term vision, it is waiting for a signal.
"We are now in some sort of really bad show in a circus that needs someone bold to come in and end this show," she said. "If Burnham takes the right bold decision, Labour will have a possibility of winning the next general election. If he comes in with the same mentality, attacking the rich, attacking landlords, I think it would either be a general election very soon or a massive economic problem very soon."
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