Andy Burnham won the Makerfield by-election on Thursday by more than 9,000 votes. By Saturday night, The Observer and Sunday Telegraph were both reporting that Keir Starmer was preparing to set out a timetable for departure as early as Monday. Rachel Reeves is widely expected to be replaced. Cabinet resignations could come this week as pressure builds.
Most of the immediate financial commentary has focused on gilt yields and what a leadership transition means for the bond market. That’s a real story - but it’s being told entirely through a lending lens. There are four distinct insurance angles sitting in Burnham’s policy programme that have received almost no coverage. We’ve pulled those out for you.
Burnham has stated explicitly that he supports rent controls. That’s on top of the Renters’ Rights Act, which came into force on 1 May 2026 and already represents the most significant legislative overhaul of the private rented sector in a generation. The combination matters for landlord insurance specialists.
The BTL insurance market isn’t collapsing - it’s sorting itself out. The landlords leaving are mostly the financially stretched ones. The ones staying tend to be more professional, better capitalised, and considerably more likely to carry proper cover. Burnham’s record in Greater Manchester reinforces this: his approach has combined enforcement against non-compliant landlords with financial support for good ones, including grants of up to £30,000 for EPC improvements through the Good Landlord Charter.
The insurance opportunity is in the professionalisation of the remaining BTL market. Landlords operating under tighter regulation, with greater liability exposure under the Renters’ Rights Act and potential compulsory purchase powers for non-decent homes - another Burnham policy from his Manchester playbook - have a stronger incentive to hold comprehensive, properly structured cover. Brokers serving this segment should be reviewing clients’ existing policies against the new regulatory landscape now, not after a claim.
Burnham’s proportional property tax proposal - replacing stamp duty and council tax with an annual levy of 0.48% of a property’s current assessed value - would, if implemented, require annual property revaluations. That creates something the insurance market has never really had before for residential property: a government-mandated annual trigger for property value conversations.
One thing worth being clear on: buildings insurance is based on rebuild cost, not market value. Land isn’t insurable. The proportional property tax is assessed on market value, which is a different figure - and in most of the country, a considerably higher one. A Kensington flat with a market value of £1.2 million might have a rebuild cost of £600,000. These figures don’t move in lockstep.
But the annual revaluation process creates an annual conversation between homeowners and their advisers about their property’s worth. That conversation is an opportunity for insurance brokers to address what is already a serious and well-documented problem. Insurance Business UK reported in March 2026 that underinsurance has become a systemic concern in the commercial property market, with UK property insurance claims expected to hit £6.1 billion in 2025 - the highest annual payout on record. In the residential market, a majority of UK properties were underinsured in 2025 according to industry data, with rebuild costs having risen approximately 30-35% between 2020 and 2025.
Annual property revaluations, if the tax reform proceeds, would hand insurance brokers a structured annual hook for rebuild cost reviews. The professional risk of not using it - a client who is underinsured discovering the fact at claim - is significant under FCA Consumer Duty obligations.
Under Burnham’s proposed proportional property tax, second homes, foreign owners and empty properties would pay double the standard rate - 0.96% annually rather than 0.48%. That’s a significant financial incentive to either occupy, let or sell such properties rather than leave them vacant.
From an insurance standpoint, this changes the composition of what has historically been a stable specialist book. Empty property is already a higher-risk category - unoccupied homes are more vulnerable to water damage, vandalism, squatting and fire, and most standard residential policies exclude or heavily restrict cover after a property has been vacant for more than 30 or 60 days. A policy environment that financially penalises vacancy will push some owners to change what they do with those properties.
Some will sell, reducing the portfolio of second and vacant homes that currently sits with specialist insurers. Others will bring properties into the lettings market - making them relevant to the landlord insurance segment discussed above. A third group will push to get tenants in quickly to reduce the tax liability, potentially making decisions that cut corners on letting standards. None of these is bad news for the insurance market. But each one requires brokers with second-home and vacant property clients to be having those conversations before the policy changes land.
This is the angle that matters most to the large carriers and will be least visible in generalist political coverage. UK life insurers - Aviva, Legal & General, M&G, Rothesay, PIC (now part of Athora) and others - hold significant gilt positions as part of their matching adjustment portfolios backing annuity books. The relationship between gilt yields and insurer solvency ratios is well established: as yields rise, the value of liabilities falls, which is a mechanical boost to solvency ratios. As yields fall, the reverse applies.
The nuance, as TwentyFour Asset Management has noted in analysis of the gilt yield moves, is that the real concern for insurers isn’t short-term yield volatility in isolation - it’s whether a prolonged period of elevated yields, driven by fiscal credibility concerns rather than economic growth, changes the investment return environment for new business in ways that compress margins on annuity pricing.
The backdrop is already stretched. KPMG’s April 2026 analysis of the UK life insurance sector found solvency coverage ratios mostly held between 170% and 250%, indicating sector resilience. But it also noted that several insurers had raised gilt allocations, citing more efficient risk-adjusted returns under the post-Solvency UK reform framework. A sustained increase in gilt yields driven by political risk - as opposed to the organic economic cycle - introduces a different quality of uncertainty than markets have been pricing in.
The 10-year gilt yield peaked at 5.137% in May when Burnham’s candidacy first emerged - its highest level since 2008. On the by-election result day it stood at 4.84%, somewhat calmer because Burnham has pledged to maintain current fiscal rules. But with public borrowing already running £5.6 billion above OBR forecast in May alone, and a potential autumn Budget from a new government with ambitious spending plans, the question the sector’s investment committees will be working through this week is whether that fiscal pledge holds once the real cost of Burnham’s housing and public investment programme becomes visible.
“Gilt investors are the canaries in Labour’s coalmine, demonstrating the increased wariness with which the UK is being viewed.”
- Susannah Streeter, Chief Investment Strategist, Wealth Club
None of this requires Burnham to actually be in Downing Street before it matters. The direction is clear enough that several of these conversations are already overdue. The Renters’ Rights Act is already in force. The underinsurance problem in the property market predates this political upheaval by years and is getting worse, not better. The gilt market has already moved.
The political shift pushes forward conversations that were coming anyway. Landlord clients need their cover reviewed against the new regulatory landscape. Property clients in London and the South East need a proper discussion about how annual revaluations - if the tax reform goes ahead - affect their insurance position. Second-home owners face a different financial calculation on vacant property. And in the life sector, the investment committee conversation about fiscal risk and gilt duration is live this week.
The brokers who call clients first this week will find it opens doors. The ones who wait for certainty will be explaining why they didn’t.
