In the wake of Keir Starmer’s resignation as Prime Minister, UK business leaders are calling for decisive actions from the incoming government to rejuvenate the economy. The anticipated leadership of Andy Burnham is prompting discussions about the necessary vision and strategies to attract investment and address the pressing housing crisis.
Call for Visionary Leadership
Marc Vlessing, the chair of property development firm Pocket Living, emphasises the need for leaders who possess a clear vision for the UK’s future. “We need people with a vision, that’s what this is all about,” he stated, expressing concerns over Starmer’s lack of boldness. Vlessing described Starmer as an “important transition figure” but cautioned that the country is experiencing its lowest level of inward investment in two decades. He remarked, “Inward investment in the UK is lower today than it has been at any point in the last 20 years from abroad, so we need to fix that.”
As the dust settles from Starmer’s unexpected departure, financial markets have reacted calmly, with UK government bond yields declining by approximately three basis points and the pound dipping by 0.2% against the dollar. However, some business leaders express frustration at the uncertainty surrounding the upcoming budget, critical for economic planning.
The Road Ahead for Burnham
Should Andy Burnham, the former Mayor of Greater Manchester, ascend to the role of Prime Minister, Vlessing anticipates a cautious yet strategic approach towards fostering better relations with the European Union over the next three years. He expects Burnham to make significant strides in devolution, empowering metro mayors to take more decisive action.
The business community is particularly keen on reforms in key sectors, including health, defence, energy, and housing. The Confederation of British Industry (CBI) has underscored the urgent need for clarity and direction from the government, insisting that “businesses need to know that there is not going to be further drift or delay.”
Urgent Reforms Needed in Housing
In the realm of housing, Vlessing advocates for a transformative shift, urging the government to decentralise the power of the Treasury. This could involve granting more authority to devolved regional governments and enabling Homes England to leverage its existing powers more effectively. He stated, “The big change that the country needs to see is the unshackling of the power of the Treasury.”
To prevent adverse market reactions, Vlessing highlights the necessity for Burnham to signal bold reforms, including potential changes to the state pension triple lock and capital gains tax. He has voiced support for Wes Streeting as Chancellor, emphasising the need for a Treasury leader who can think innovatively, alongside John Healey as Housing Secretary to invigorate Homes England’s initiatives.
Housing Shortage Crisis
Recent projections from property consultancy Savills have revealed a concerning outlook for new housing completions in England. The firm forecasts an average of 167,500 new homes annually until 2029/30, significantly below the government’s target of 300,000 homes per year. Over the next five years, Savills estimates a total of 837,500 new homes, aligning with the 20-year average but falling short of the ambitious 1.5 million target set by the government.
The situation is exacerbated by a substantial decline in new home completions, which fell by 4.1% to 190,602 in the year leading up to March 2025. Overall, completions have dropped by 10.2% since the conclusion of the Help to Buy scheme, indicating a pressing need for revitalised construction efforts.
Why It Matters
The departure of Starmer and the potential leadership of Burnham present a critical juncture for the UK economy. Business leaders are urging immediate and bold reforms to address investment concerns and the housing crisis, all while navigating a complex political landscape. The actions taken in the coming months will be pivotal in shaping the economic recovery and ensuring that the UK remains an attractive destination for both domestic and foreign investment. As the nation awaits new leadership, the emphasis on visionary decision-making will be crucial for long-term growth and stability.