Starmer’s resignation: what does it mean for mortgages?

Monday 22^nd June saw Keir Starmer resign as Prime Minister and Labour leader. The resignation does not directly impact mortgage rates, as changes were taking place before this announcement. However, it could influence mortgage rates indirectly through financial markets and future government policies.

The mortgage market has reacted relatively calmly to Starmer’s resignation as it was widely anticipated. Gilt yields represent borrowing costs of the government and heavily influence fixed-rate mortgage pricing, but have not drastically changed.

Mortgages

A change of Prime Minister doesn’t automatically affect the future of the Bank of England base rates, gilt yields, and lender competition and funding costs. However, it could have an impact on:

• Markets becoming anxious about government spending – if gilt yields increase, this could pressurise fixed mortgage rates to rise
• If there is political uncertainty – lenders may feel a little more wary and change their prices more frequently

If the transition in leadership is smooth, we may see very little to no impact.

Borrowers

There is no need to panic or rush into anything because of the resignation. If you were already looking at remortgaging, or buying your first home, it’s advisable to speak to a mortgage broker who can secure you a rate that they can review regularly to ensure you are getting the best option available to you.

To summarise, the Prime Minister’s resignation is unlikely to change anything overnight, but policies set by the next government could influence rates in the future. Mortgage rates are determined by the market, which is driven by:

• The Bank of England
• Swap rates
• Individual lenders
• Economic indicators
• Political and market stability 

For free mortgage advice, speak to the team at Mortgage Required at 01628 507477.