Sir Keir Starmer’s resignation as prime minister has rattled property and mortgage markets, with industry experts warning that recent declines in mortgage rates could stall and calling on his expected successor, Andy Burnham, to abolish stamp duty.

Starmer announced his departure on Monday in a statement outside 10 Downing Street, saying every decision he had taken in office had been made with the country’s interests first. He will remain in post until Labour selects a new leader, a process he has asked the party’s governing body to complete before parliament returns in September.

Burnham, who entered the House of Commons last week as the MP for Makerfield, is widely expected to succeed Starmer as Labour leader.

Sterling fell to $1.32 against the US dollar, its lowest level since November 2025, and to €1.15 against the euro, its weakest since February. The FTSE 100 held broadly flat and gilt yields remained stable, suggesting markets are not anticipating an immediate fiscal crisis.

Property professionals were less sanguine about the outlook for the housing market. Aaron Strutt, product and communications director at Trinity Financial in London, said the run of mortgage rate cuts seen in recent weeks was likely to slow. “Mortgage rates have been coming down for weeks, but these price reductions could slow down,” he said, adding that sterling faced “serious risks” from the political uncertainty.

Doug Miller, director at Lansdown Financial Services in Bath, warned that swap rates could become more volatile as markets reassess the fiscal outlook. “This adds yet another degree of uncertainty in an already volatile market,” he said, though he noted that multiple lenders had announced rate reductions in recent weeks, meaning the picture was “not all doom and gloom”.

Riz Malik, an independent financial adviser at R3 Wealth in Southend-on-Sea, argued that Burnham could stabilise the housing market by setting out a timetable for stamp duty reform. “Without this, he carries a greater risk that a negative bond market reaction could impact mortgage pricing,” Malik said.

Justin Moy, managing director at EHF Mortgages in Chelmsford, said attention should focus less on the next prime minister and more on who takes the chancellorship. “The Chancellor will have the greatest say in the housing market from this point on,” he said, adding that confidence in fiscal policy would be the key driver of both mortgage rates and housebuilding activity.

Richard Davidson, a mortgage adviser at OnlineMortgageAdvisor.co.uk, said borrowers should not delay decisions in anticipation of political clarity. “Political certainty almost never arrives,” he said. “Line your deal up now and you can usually switch if something better lands before you complete.” Davidson added that the Bank of England’s decision to hold the base rate at 3.75% last week, combined with an orderly leadership transition, should keep the gradual downward trend in fixed-rate deals on track.

Elliott Culley, director at Switch Mortgage Finance in Hayling Island, said the episode underlined the fragility of conditions for the housing market. “For the housing market to recover and grow it requires stability,” he said. “This seems almost impossible right now as another prime minister fails to last the full term.”