Seven Prime Ministers, one lesson mortgage firm owners keep ignoring – Flavin

Andy Burnham is the overwhelming favourite to replace him, with a new Prime Minister likely in place before Parliament returns in September. 

That will make seven leaders in a decade – a period of political turbulence that has coincided with a global pandemic, a cost-of-living crisis, the fastest interest rate cycle in a generation, and a housing market that has lurched between paralysis and frenzy, depending on which policy happened to be live that month.

Seven Prime Ministers. Stamp duty changes, reversals, and reinventions. Help to Buy launched and wound down. Liz Truss’s mini Budget and the mortgage market chaos that followed it. Consumer Duty. The Renters’ Rights Act. Freedom to Buy. 

Mortgage firms have been consistent 

Through all of it, the mortgage firms that have grown consistently – that have added revenue, added people, and built something genuinely scalable – have had one thing in common. They stopped making their business plans dependent on what Westminster was doing next. 

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That is the lesson this week is teaching, if you’re willing to hear it. 

Burnham arrives with an ambitious housing agenda. A £40bn council house programme. Potential property tax reform replacing stamp duty and council tax with an annual levy of 0.48% of a property’s value. Rent controls that would significantly reshape the buy-to-let (BTL) market. 

Some of this will happen. Some won’t. The timescales are uncertain. The detail is not yet written. 

The bond market has already responded. When Burnham’s candidacy became live, the 10-year gilt yield hit 5.137% – its highest level since 2008. Long-dated gilt yields feed directly into swap rates, which set the price of fixed mortgages. The average two-year fix currently stands at 5.64% and the five-year at 5.6% – and that’s before any policy announcements from a new administration have been made. The transmission mechanism from political uncertainty to mortgage pricing is fast, impersonal, and entirely outside your control. 

Which is precisely the point. 

In the next few months, your clients will ask you what the change in Prime Minister means for their mortgage. Some will want to wait and see. Some will panic. Some will use the uncertainty as a reason to delay a decision they were already reluctant to make. Your job, as always, is to give them clarity in the absence of certainty. Lock in a competitive rate now with the ability to switch to a lower rate before completion if something better comes along. Waiting for political certainty to deliver lower mortgage rates is not a strategy – rolling onto a standard variable rate (SVR) of 7.13% while you wait is an expensive lesson.

You know all of that. You’ll handle those conversations well. 

What’s the business plan? 

The harder question – the one I want to ask you as a firm owner rather than as an adviser – is this. What does your business look like if the next 12 months are as politically and economically turbulent as the last 12? 

Because here’s what I see consistently in small mortgage firms. When the market is active and the pipeline is full, the operational weaknesses don’t show. Clients come in, cases get written, money lands in the account. The fact that there’s no documented advice process, no consistent protection conversation, no management information worth looking at – none of that feels urgent when the phone is ringing. 

Then something changes. A political shock. A rate spike. A slowdown in transaction volumes. And suddenly the firm that looked healthy reveals itself as entirely dependent on external conditions staying favourable. There are no systems to fall back on. No reliable metrics to diagnose what’s wrong. No process that works independently of the owner being in the room. As Warren Buffett famously said: “You only get to see who’s swimming naked when the tide goes out”. 

Whatever the political trajectory, 1.8 million fixed rate mortgages expire in 2026. That refinancing wave doesn’t care who’s in Downing Street. The volume opportunity is real and it’s sitting in front of you now. But volume only converts to sustainable revenue in a firm with the infrastructure to handle it – consistently, at scale, without everything running through the owner.

Burnham’s potential property tax reforms will affect client decision-making, particularly in higher-value markets. Annual revaluations, if they arrive, would turn house price growth into an ongoing tax liability – changing how clients think about upsizing, downsizing, and staying put. The BTL market faces further pressure if rent controls materialise. These are real changes that will shape your client conversations over the coming years.

But they are external. You can’t control them. You can only control how well your firm is positioned to respond to whatever arrives. 

The mortgage firms I’ve watched grow through the last decade of political turbulence – through Truss, through the rate cycle, through Consumer Duty, through all of it – are not the ones that predicted what was coming. They’re the ones who built businesses robust enough to handle what they didn’t predict. 

That means a documented advice process that runs whether or not you’re in the building. A protection conversation that happens for every eligible client, not just the ones who ask. Management information that tells you what’s actually happening in the business rather than what you hope is happening. A team that’s been properly trained and properly led, not just supervised from a distance while the owner writes cases. 

Seven Prime Ministers in a decade. The next one arrives this summer. 

The question isn’t what Burnham will do to the housing market. The question is whether your business is built to handle the answer – whatever it turns out to be.