What it Means for the Housing Market in Herne Hill
On the morning of Monday 22 June, 2026, Keir Starmer stood outside 10 Downing Street and announced what many of us had seen coming – though admittedly, perhaps not quite this quickly.
In an at times emotional address, he confirmed to a crowd of staff, supporters and reporters lined up in front of that famous, black lacquered front door that he was stepping down as leader of the Labour Party and Prime Minister, and will leave that top job within weeks, just two years after being elected in a landslide in July 2024.
Was it inevitable? Not quite. Admittedly, Andy Burnham’s victory in the Makerfield by-election, which had returned the Greater Manchester mayor to Parliament, had obviously cleared the path for him to mount a leadership challenge, and the numbers were certainly becoming difficult to ignore. Nevertheless, as recently as Friday 19 June, Starmer had vowed to stand and fight in any leadership contest, stating: “I’m not going to walk away from that [responsibility].”
The weekend changed the arithmetic, though. The prospect of a publicly bruising internal contest, with Burnham on one side and a weakened Prime Minister on the other, risked doing serious damage, both to the party and to the country’s perception of political stability. Senior figures from the Labour party were reported to have offered their counsel to Keir Starmer that the fight was up – and especially that the optics would do nobody any good.
And so, the announcement on Monday morning, whilst striking, does not come as a shock.
Leaders in similar positions have faced the same moment and made the same call: accept fate with good grace, rather than let events spiral. The departures of Boris Johnson, Theresa May, Liz Truss, and Rishi Sunak all followed periods in which continuing to fight became harder to justify than stepping aside – in Sunak’s case, not through resigning, but by rolling the dice and calling what was essentially an unwinnable election earlier than required.
There is something to be said for recognising when the best act of leadership is to make way. It is something that transcends the political divide.
A Hard Job, Made Harder in Modern Times
Whatever your politics, being Prime Minister in the modern era is a punishing role. By the end of 2025, opinion polls rated Starmer as one of Britain’s most unpopular prime ministers, despite his net approval remaining higher than Boris Johnson’s during Partygate and Liz Truss’s when she resigned. That gives some measure of perspective. The scrutiny is relentless, the media cycle unforgiving, and social media even more brutal and less challenged. The narrative that forms around what a government promises and what it can deliver in practice is never kind to whoever takes up that mantle.
Though this current Labour government was ushered into power with one of Labour’s largest parliamentary majorities, Starmer himself was ultimately weakened by dwindling poll ratings, Labour infighting, and growing public frustration over its failure to deliver quickly on growth and the cost of living.
We might well feel sympathy for the human being in that position. But we are also property professionals, tasked to help people move through one of life’s most stressful and expensive moments, by any measure. The buyers, sellers, landlords and tenants we serve live in the real world of economic consequence, and turbulent politics leads to economic uncertainty and upheaval.
The Market Has Felt Every Tremor
The housing market does not operate in a political vacuum. It never has. Not least in Herne Hill.
The last Budget, pushed back late in 2025, with all the speculation about its contents that brought, created a period of genuine paralysis. That hesitation cost the market momentum at a critical moment. Take Herne Hill, for example; July through to December 2024 saw 143 transactions; the same period in 2025, hampered by that Budget speculation, saw just 104 transactions: a 27% fall in activity, and all for a Budget whose announcements really impacted the market very little, in the end. It was the speculation and uncertainty that led to the decline in activity.
It would be unfair to lay all the difficulties of the past couple of years entirely at Starmer’s door, or his government’s – in particular the turbulence caused by wider geo-political issues we have seen play out this year, as conflict has escalated between the USA, Israel and Iran.
Nevertheless, the property market, in its early recovery from that latter 2025 period, was far too fragile heading into that period of turbulence earlier this year, and fragile markets don’t ride those waves easily. They stall. And when activity stalls, chains break, people’s moving plans get put on hold, and confidence – perhaps that most essential ingredient of all – ebbs away.
The picture has been gradually improving over the past few weeks. There are all the signals of stabilisation in the property market. Transaction levels have been at a low ebb, as I have written about more than once – not least in my article just last week; but stock levels are high and buyer confidence seems to be returning just as mortgage rates are easing.
Sentiment is cautiously positive, and the long-term fundamentals of the SE24 market remain sound. But the property market needs calmness and stability if it is going to thrive.
Seven Prime Ministers in a Decade
Today’s announcement sets the stage for the United Kingdom’s seventh prime minister within a decade. That is equally as remarkable as it is troubling. Not because any single departure is catastrophic on its own, but because the cumulative effect of persistent political upheaval is the enemy of the one thing property markets need most: sustained confidence.
History shows us that the outcomes of this sort of political change can differ – often depending on prevailing market conditions. When Theresa May resigned in June 2019, the proliferation of sub-2% five-year fixed-rate mortgages softened the blow for the housing market. Conditions were benign enough at that time that the overall uncertainty it brought with it was absorbed. If we look at how markets reacted to Liz Truss and her resignation, by contrast, we learn a stark lesson about what happens when political and economic turbulence combine. Mortgage products were hastily withdrawn, interest rates rose sharply, and anxious borrowers on variable rates found their monthly payments rocketing. The market took years to fully recover – something we see when reviewing transaction data; people worry that this year has been low, but in terms of net sales agreed – as I mentioned in last week’s article – we are enjoying the third best year since 2017. By contrast, 2023 – that post-Truss year – was one of the worst performers of the past decade.
As it goes, today’s market reaction has, so far, been relatively muted. Sterling weakened very slightly, and gilt markets held steady. This is because, by and large, what happened was not a surprise. Starmer has in effect done what it seems a majority of people wanted him to. That relative calm might, in itself, be a signal. When a leadership change is orderly and broadly anticipated, markets tend to hold their nerve.
What Comes Next?
The question we now face is: do we get a leadership contest, or just a coronation? And the second question: does it matter?
If the Labour Party decides to unite around one person as its next leader without an internal contest, a new Prime Minister could be in place by July. All current signs point towards exactly that outcome, with Burnham as the clear frontrunner. This is because Wes Streeting, who had been a potential rival, threw his support behind Burnham within hours of his announcing he will stand, which was within minutes – reasonably speaking – of Starmer’s own address.
If so, then without making a political statement, but simply focusing on fiscal affairs, this could be the most positive outcome for the property market – not just in Herne Hill, but across the nation as a whole. Why? Because Burnham brings something relatively rare in British politics to the table: overall public goodwill.
Polling has consistently shown him to be one of the few senior politicians with a positive approval rating across the country. If the transition is swift and orderly, and results in a leader with genuine momentum, that matters enormously for what follows.
But there are caveats. What will Andy Burnham’s mandate be to pursue the political direction of Andy Burnham?
Investors face an uncertain month or two ahead, with the key question being not necessarily who becomes Prime Minister, but whether the change in leadership increases the likelihood of a general election or significantly alters the direction of policy.
If it is to be Andy Burnham – as seems likely – we can, from a professional point of view, take some reassurance from the way he has handled his role as Mayor of Greater Manchester.
But the top job is different from a mayoral one. Burnham will need to actively woo the City in a way that he has not shown an inclination to do so far.
For the housing market, the identity of the next Chancellor may prove as important as that of the next Prime Minister. Policy continuity in planning, housebuilding, proposed changes to the house-buying process, and the further implementation of the Renters’ Rights Act, among other live issues such as changes slated for EPC requirements and safe homes standards, all depend on the team put in place by the new leader.
From housebuilding targets we are currently significantly behind, to the ongoing process of rental market reform and the turmoil that has caused, the property sector really needs a stable team with a clear mandate and the time to see it through.
That famous, black lacquered front door at number 10 Downing Street may as well have become a revolving door, as far as history will record it; but it has also meant revolving priorities. That cannot continue to be the story.
A Reason for Cautious Optimism
There is also a broader lesson here that goes beyond who is prime minister or which party holds office. Markets respond to competence, continuity and predictability. They do not demand perfection, but they do require stability and will baulk at turbulence.
The same is true for the housing market. Buyers want reassurance. Sellers want momentum. Landlords, above all, would love a bit of clarity. Tenants want a system that works and protects their interests.
A messy leadership battle would have been a worse outcome for everyone involved, politically and economically, and no matter anyone’s personal views of Starmer, we might be grateful to him that he has avoided inflicting that on us.
Politics alone does not determine the fate of housing market, of course. Interest rates, wages, lending conditions and regional supply pressures matter too. Nevertheless, the political backdrop can definitely set out the mood music, and mood music counts for more than many people admit.
A government that looks divided can make a market feel unsettled. A government that looks settled can help confidence return. And perhaps our collective focus may be allowed to return to the real issues: housing supply, planning reform, affordability, rental standards and the wider health of the property market.
The housing market is improving, but it will only truly thrive when it is stable. The next few weeks will be telling.
Whatever political colours anyone wears, the thing that buyers, sellers, landlords and tenants need most right now is a prolonged period of genuine, sustained calm. That to us means sensible, well-paced growth, predictable policy, and a government focused on delivery rather than survival. If this transition is as smooth as it currently appears, and if Andy Burnham can bring the kind of ground-level credibility that his record suggests he might, there is reason to be cautiously optimistic.
The market has shown considerable resilience in the face of extraordinary pressure. It deserves a period of political calm now, to let it catch its own breath.