What will a new Prime Minister mean for the UK real estate sector?

At 9.30am on 22 June 2026, Sir Keir Starmer announced his resignation as prime minister. Though what happens next, and when that happens, depends on a number of factors, it is “odds on” that the next prime minister (the seventh in ten years!) will be Andy Burnham, the newly elected MP for Makerfield. If that were to happen, what could that mean for the real estate sector — one of the most important areas of business in the UK, given the number of people employed in the sector and the role it plays in attracting overseas investment?

Perhaps the biggest boost the currently quiet commercial property market would receive is an end to the political uncertainty that has been a feature recently, whether from a domestic or global perspective. The signs are that without a contested leadership race, the new prime minister could be in place by mid-July. But that is only one step towards generating clarity. What about the policies that impact real estate?  

A new prime minister could lead to a change in the way individuals are taxed, with the focus on taxing income derived from assets owned rather than that earned through work. In addition, some commentators have predicted reforms to council tax and stamp duty land tax, with an eye on the policy of raising property taxes generally. One possible outcome has the latter two taxes replaced by a land value tax, a flat rate tax based on a percentage of the value of the relevant property, with a higher rate applying to certain categories of investors i.e. second home owners; overseas investors. 

Such a policy would have a large impact on those living in London/South East and landlords, not to mention overseas investors, in particular high net worth individuals and family offices, who have continued to view the UK as the number one choice for their commercial property investments. Data from JLL estimates that, on the back of strong fundamentals such as a strong legal system, time zone, liquidity and quality assets, individuals and family offices acquired £4.5 billion of commercial property in London alone, more than double that of the next highest European city (Paris). Foreign investment in the UK is not limited to London, with Birmingham, Liverpool, Manchester and Oxford all proving popular. Setting aside the complexities of reforming the existing property tax regime and implementing one that globally has rarely, if ever, been implemented, such reform would need to balance the interests of groups with competing aims from their property ownership, i.e. owner occupiers and foreign investors.

Andy Burnham has pledged to cut business rates for pubs and music venues by 20%. However, what is not clear is whether, if he were to be PM, there would be any changes to the business rates regime as a whole. Another possible policy that has been mentioned is the abolition of business rates for shops, cafés and restaurants. What is not clear is how it is proposed the tax shortfall from such a policy will be filled.

Other possible real estate tax changes could impact capital gains tax rates, to bring them into line with income tax and the creation of a new tourist tax.

An important point that often gets overlooked when there is a leadership change is the accompanying change of personnel in ministerial roles across government. At UKREiiF last month, I was encouraged by the comment of a senior director at a large housebuilder that the current government was the most willing to engage with their business in years. It is hoped that goodwill built up over the last 2 years will continue, helping to form the foundation of a successful partnership between industry and government to deliver a thriving real estate sector of which the country can be proud.

Whoever takes over as prime minister next, will face challenges and opportunities. They will need to move quickly and decisively to ensure we do not drift into a period of uncertainty. As with most things, they will need a bit of luck along the way. An England win in the World Cup final on 19 July could be just what our new PM needs to get their tenure off to a flying start.