Stamp duty reform and political clarity are now the mortgage market's most urgent asks from the new prime minister
Andy Burnham's arrival in Downing Street has been met with cautious optimism from mortgage professionals, but the industry knows what it wants. Reform of property taxation, fewer pre-Budget rumours, and a confidence boost for a housing sector that has spent years absorbing political uncertainty.
Nicholas Mendes (pictured top), mortgage technical manager and head of marketing at John Charcol, told Mortgage Introducer the reshuffle contained some unexpected appointments but that the overall direction looked considered. "In terms of some of the appointments into the cabinet, there's been some real odd ones," he said. "But it keeps it quite balanced in terms of you're not favouring either one side or the other."
Burnham replaced Rachel Reeves at the Treasury with John Healey, who had served as defence secretary under Sir Keir Starmer, while Angela Rayner was reappointed housing secretary. Ed Miliband became foreign secretary and Shabana Mahmood was retained as home secretary. David Lammy, Steve Reed, and Peter Kyle also departed, marking a significant break from the Starmer era.
With Labour having less than two years left in its current term, Mendes argued the new prime minister had little time to waste. "The change was needed, which was quite clear," he said. "They've got 18 to 24 months left in terms of their term, so it needed some radical changes."
Stamp duty in the spotlight
Of all the policy areas in play, stamp duty drew the strongest reaction. Mendes described reform as long overdue, with the potential to benefit every segment of the housing market.
"I think the change in stamp duty is certainly needed," he said. "That will help people in the property market. First-time buyers, home movers, upsizing, but I think also for the downsizing as well. A lot of people have been put off downsizing because of the cost associated with it. I've always felt that, especially if you're downsizing, there should be a bit of leeway in stamp duty that really helps unlock the market."
Burnham's stamp duty plans have drawn cautious optimism from brokers and network leaders, but his backing for replacing both stamp duty and council tax with a proportional property levy – aligned with the cross-party Fairer Share campaign's proposals – remains broad in principle and short on detail.
Swap rates and the limits of political influence
On mortgage pricing, Mendes is direct. Swap rate volatility since Burnham's appointment reflects global conditions, not domestic policy.
"In terms of rates, obviously we're seeing swaps jumping around and I think that's more to do with global events than it is to do with Burnham himself in the few days he's been in," he said. "I think it'd be a bit harsh to say it's all his fault."
Markets had not reacted unfavourably when Burnham's path to the Labour leadership became clear. "As soon as it was mooted that Burnham was going to be unchallenged going to the position in Number 10, markets didn't react unfavourably," he said.
As the Bank of England's Monetary Policy Committee weighs its next rate decision, analysts have flagged that sustained gilt yield pressure could feed through to fixed-rate mortgage pricing, a dynamic largely outside any prime minister's control.
Buy-to-let: adapting regardless of who governs
On buy-to-let, Mendes offered a grounded assessment. Landlord clients at John Charcol have been repositioning their portfolios for some time, driven not by any single policy, but by the sustained pressure of higher rates.
"The buy-to-let clients that we've been talking to, regardless of who's in power, I think they've been pretty under the cosh for a while," he said. "In a period where you had low rates, it was very easy to get a property, flip it or hold onto it. You had the rental income, you had the growth. Whereas now, in the last few years where we have seen rates a lot higher, we're definitely seeing a lot of clients adjusting their portfolios."
UK Finance data for Q1 shows buy-to-let house purchase loans fell 14.9% year-on-year to 16,871, even as overall lending rose on the back of remortgaging activity, which was up 11.1%. As buy-to-let landlords assess what Burnham's arrival means for their holdings, Mendes argued the exodus narrative has been overstated. "Any exodus that we've seen with landlords has just been due to the period in which they've operated in," he said.
What the market actually needs
Mendes reserved his sharpest comments for the way policy is communicated – a grievance rooted in the drawn-out pre-Budget period under Starmer, when months of rumour depressed activity before the autumn Budget was eventually delivered last November.
"I do hope that there's less rumours and less spillage in terms of what the plans are, and that it comes out in a really detailed way, but it comes out sooner as well," he said.
Beyond communication, Mendes added that the market needs something to believe in. Rates, he acknowledged, are beyond anyone in governments control, but housing policy is not.
"What the mortgage market needs and the property market needs is just an injection of confidence, an injection of positivity," he said. "Rates are very much out of control of the lenders and out of control of Burnham, with everything that's happening in the world. But certainly, there are things that they could do to really support borrowers and support those downsizing, to really get the market moving again."
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