Letter From The Founder: What Andy Burnham Could Mean For Your Money

Keir Starmer resigned as UK Prime Minister on Monday, causing concern about what it could mean for the UK economically.

Every time there is political upheaval, my inbox does the same thing. It fills up with variations of the same question: what does this mean for my money?

This week, the question is about Andy Burnham. Keir Starmer resigned on Monday. Burnham is the only declared candidate for the Labour leadership. Nominations open on 9 July and close on 16 July. If nobody else enters, he could be Prime Minister by 17 July. Even if there is a contest, he should be in Downing Street before Parliament returns in September.

So yes, it is worth knowing what he actually stands for, before the noise takes over.

First, a reality check on mortgages

A lot of the coverage this week has talked about what a Burnham government could mean for mortgage rates.
The average two-year fixed mortgage rate is currently 5.68%, and the average five-year fixed rate is 5.63%. Both have been coming down after a spike earlier this year, but they are still well above where they were a couple of years ago.

Here is the important bit: politicians do not set mortgage rates. Banks and lenders do, based on what is happening in the wider economy. A new prime minister can affect market confidence, but they cannot dial rates up or down directly. Anyone suggesting otherwise is oversimplifying.

What does matter is how financial markets respond to what a new government plans to spend. When investors and lenders look at a new prime minister, one of the first things they assess is whether the government’s promises will cost more than the country can afford to pay for.

If they think the answer is yes, they get nervous, and that nervousness tends to show up in higher mortgage rates. Burnham has publicly committed to living within the government’s existing financial limits, and markets have responded calmly to that. His choice of chancellor, whenever that is announced, will matter more than almost anything else in his first few months.

The big policy: stamp duty could go

This is the one Burnham has spoken about most consistently, and I think it deserves proper attention rather than the usual shouty headlines.
The proposal is to scrap both stamp duty and council tax and replace them with a single annual charge based on your property’s current value. Under the version he has backed, that charge would be set at 0.48% of your home’s value each year.

To make that concrete: on a £300,000 home, you would pay £1,440 a year. On a £500,000 home, £2,400 a year.

Whether that is better or worse for you depends entirely on where you live and where you are in life. In lower-value areas outside London and the South East, many homeowners would actually pay less than they do now. In more expensive areas, many would pay more.

The upside is real and significant. Removing stamp duty on completion means buying and moving becomes dramatically cheaper upfront. That is good for the housing market and good for people who are stuck in homes they have long outgrown because moving costs too much.

But, there is a downside. If you are older, own your home outright, and live on a fixed income, an annual bill that rises with house prices creates a genuine problem. You cannot sell a slice of your house to pay it.

I want to be clear: this is not imminent. Burnham has presented this as a direction of travel, not a ready policy. Big tax changes take years. But given where things are heading politically, the direction matters.

Two things already scheduled that Burnham might reverse

There are two changes already in law for April 2027 that I have covered before and think are worth watching closely in the context of a leadership change.

The first is pension pots being brought into inheritance tax. The second is a reduction in the annual Cash ISA allowance. Both have been deeply unpopular. Both are the kind of early move a new prime minister might quietly reverse to signal goodwill, without it costing much politically.

Burnham has also previously spoken about unfreezing the personal allowance, which is the amount you can earn before you start paying income tax at all. It has been stuck at £12,570 since 2021, meaning more and more people have been dragged into paying tax as wages have risen. Whether that survives contact with the Treasury is a different question, but it is worth noting.

So what should you do right now?

The same thing you should always do: focus on what you can control.

If your fixed mortgage deal ends in the next six months, talk to a broker now. Most lenders let you lock in a rate up to six months before your deal ends. If rates fall before you complete, most will let you switch to the lower one. That means you get the protection if rates rise, without being stuck if they fall.

If you are thinking about moving home, make that decision based on your life and your finances today, not on a property tax that may or may not be designed, legislated, and implemented over the next several years.

Here is the tension I keep coming back to. Political uncertainty is real this week in a way it has not been for a while. We are watching a Prime Minister resign, a leadership contest unfold, and a potential incoming PM with some genuinely significant ideas about property and tax.
But waiting for the dust to settle is not really a strategy.

There will always be something happening. The people who make the best financial decisions are almost never the ones who were waiting for certainty. They are the ones who made the best decision available to them at the time, with the information they had.

That is what I am suggesting you do.