With a potential change of government on the horizon, questions are being raised about what it could mean for the mortgage market, house prices and property taxation. George Abouzolof, Senior Mortgage Broker at Clifton Private Finance, explores how an Andy Burnham leadership could affect mortgage rates, stamp duty and borrowing costs, and whether homeowners should be preparing for a period of market uncertainty.
Could Burnham send mortgage payments soaring?
“Financial markets tend to hate uncertainty, and a change of Prime Minister often sparks questions about taxes, spending and government borrowing.
If investors become nervous about the direction of a Burnham government, the cost of government borrowing could climb, and mortgage lenders may respond by pushing up fixed-rate deals.
For millions of homeowners, that could mean paying more when it’s time to remortgage. Prospective homebuyers could also find themselves caught in the crossfire.
If lenders become more cautious during a period of political uncertainty, mortgage rates could remain higher for longer, making affordability tests tougher and reducing how much some buyers can borrow.”
George Abouzolof, Senior Mortgage Broker at Clifton Private Finance
Stamp duty shake-up – could buyers finally catch a break?
“For those currently saving for a deposit, the picture is mixed. Higher mortgage rates can cool housing market demand, potentially slowing house price growth and giving first-time buyers a better chance of getting onto the property ladder.
However, any benefit could quickly be cancelled out if borrowing costs rise faster than property prices fall.
The other area to watch is housing policy. Burnham has previously spoken about reforming property taxes and questioned whether stamp duty remains fit for purpose.
If a future government were to reduce or overhaul stamp duty, some buyers could find moving home or purchasing their first property more affordable.
However, major changes to housing taxes often create uncertainty of their own. Buyers may delay purchases while waiting to see what reforms are introduced, while sellers could hold off listing their homes if they believe better conditions are around the corner.
Ultimately, first impressions aren’t always the full story. If Burnham quickly convinces markets that his plans are affordable and economically credible, those early fears could disappear, and mortgage rates may eventually start drifting lower again.
For now, homeowners and aspiring buyers should focus less on the politics and more on the markets. The biggest risk to your mortgage or homebuying plans isn’t necessarily a new Prime Minister; it’s how investors react to the economic policies that follow.”
George Abouzolof, Senior Mortgage Broker at Clifton Private Finance
