Starmer resignation: Mortgage expert explains impact on Brits

How will Keir Starmer’s resignation impact mortgage rates?

“Political instability doesn't move the Bank of England base rate overnight, but it does shake confidence, which is a crucial aspect of anything to do with property finance. Low trust can cause a domino effect across the market. Lenders tighten their criteria. Valuers get cautious. Buyers hesitate. And hesitation, in a time-sensitive deal, is the same as a no.

“Rates have been going down, with the base rate currently sitting at 3.75%. That should be good news, but swap rates - the mechanism that actually prices your fixed-rate mortgage - don't respond to base rate alone. They respond to market sentiment, which has just taken another knock.

“We've had a Middle East conflict rattling energy prices and inflation forecasts all year. We now have a leadership vacuum at Westminster until at least September. The honest answer to "where will rates be at Christmas?" is: nobody knows. Forecasts for the end of 2026 range from 3.5% to 4.25%, which is a wide margin of error.

“If you're waiting for political stability before making your move in property, you have been waiting since 2016. The market doesn't pause for Prime Ministers. Generally, markets react more to uncertainty than to political change itself. Confidence is key to stable mortgage rates.”

What should I do if I'm looking for a mortgage now?

"Many lenders allow borrowers to secure a mortgage deal up to six months before completion or before their current deal expires. For anyone concerned about rates rising during the political transition, locking in a rate now can provide valuable protection while still leaving open the possibility of switching if cheaper products become available before completion.

“Faced with this kind of uncertainty, potential buyers could turn to bridging finance as an option. For example, bridging in June 2026 prices between 0.52% and 0.95% per month for most mainstream cases - short-term, flexible, and critically, not dependent on long-term rate forecasting. You don't need to know where rates are in three years. You need to know where they are for the next six to twelve months - and that's a far more answerable question. Act on the deal. Manage the rate. That's what bridging finance is built for.”

What Andy Burnham as Prime Minister could mean for your mortgage

"Much like Starmer's resignation, Burnham as PM would not come as a major surprise, meaning investors have time to assess and price in the potential change.

“The greater mortgage story lies not in who occupies Number 10, but in what they do once they're there.

“Burnham has advocated replacing both council tax and stamp duty with a proportional property levy equivalent to 0.48 per cent of a property’s value. 

“Today, buyers often add stamp duty costs to their overall borrowing requirement. A new annual property levy would instead become a permanent household expense, reducing disposable income and potentially lowering the amount lenders are willing to offer through affordability assessments.

“More importantly, though, major property tax reform like this represents a significant fiscal policy shift. If investors become uncertain about the fiscal implications of such reforms, gilt yields could rise, pushing swap rates higher and increasing the cost of fixed-rate mortgages.

“That doesn't mean mortgage rates would automatically increase under a Burnham government. In fact, if reforms are viewed as economically credible and supportive of housing mobility, markets could ultimately respond positively. 

“However, the mortgage impact of Burnham as PM is likely to be far greater than the impact of Starmer's resignation, because policy changes have a much stronger influence on borrowing costs than leadership changes alone."