What Andy Burnham means for the housing sector

So: Andy Burnham is the new PM. What does that mean for the housing sector?

Property tax changes

The biggest housing shakeup Burnham is likely to spring is a major overhaul of property taxes.  

He previously suggested scrapping Stamp Duty on housing purchases and replacing it with a yearly levy based either on the value of the property or just the land it’s built on.  

But Burnham may also look at overhauling or getting rid of Council Tax, having claimed the current system is regressive. He hasn’t said yet what that might look like, but MPs have some ideas. The All-Party Parliamentary Group on Local Government recently recommended new council tax bands for higher value properties, as well as rebanding properties based on updated valuations.

On the one hand, the tax changes could make properties more affordable – especially for investors, who currently pay a surcharge on Stamp Duty. On the other, they could get more expensive to own if the new property tax is set higher than current Council Tax rates.

If the tax burden on homeowners increases, it could also affect house prices, with some market watchers predicting falls up to 20%.

A boost to housebuilding

Burnham has said he wants to oversee "the biggest council house building programme since the post-war period".  

Speeding up housebuilding would be much needed and could help to fill Britain’s housing shortage, estimated by the Centre for Policy Studies last year at a whopping 6.5 million homes.

But it’s not clear how he will deliver on that. As things stand two years after the 2024 election, the current government is already behind its target to build 1.5 million new homes by the end of this Parliament (by around 200,000), and Burnham has not yet divulged a plan for reversing it.

Rent controls?

Andy Burnham has tried to bring in rent controls before. As mayor of Greater Manchester, he asked central government for the power to freeze rents in the city, but was ultimately blocked.  

He may be more sympathetic when elected mayors ask him for powers to freeze rents in their constituencies.

As PM, he’s already made addressing the cost of living his top priority, starting with a tax cut on energy bills. Limiting rent inflation could be seen as another high-impact way to lower household costs.

However, the new Secretary of State for Housing, Communities and Local Government Angela Rayner has taken rent controls off the table for now. In an interview with the BBC, she said that “I don't think that rent freezes, rent controls, is a way forward at the moment.” She added that rent controls elsewhere in the UK hadn’t necessarily brought rents down.

Rayner also pointed out that the Renters’ Rights Act only came into force two months ago, and it already gives tenants more power to challenge rent increases.