Mortgage brokers and property experts have hailed the conclusion of the Middle East conflict as the most encouraging development for mortgage costs this year. They suggest we could see positive movements in fixed rate pricing by the end of the week. However, they warned it is not a silver bullet and stressed the need for the UK Government to address domestic factors currently dragging on property transaction levels and prices.
Trump Announces Deal with Iran
Last night, former US President Donald Trump revealed on Truth Social that the deal with the Islamic Republic of Iran is now complete. In a separate post, he proclaimed, "Let the oil flow!" The US naval blockade will be lifted, the Strait of Hormuz will reopen, and the agreement will be formally signed in Switzerland on Friday.
Expert Reactions
Jamie Elvin, director of London-based Strive Mortgages, said: "An end to the conflict is undoubtedly positive news for mortgage markets, particularly if it helps ease pressure on oil prices and global inflation expectations. We could see some lenders become more competitive on fixed rate pricing in the coming weeks, but borrowers shouldn't expect a dramatic overnight shift. While this removes one source of uncertainty, the direction of UK mortgage rates will still be driven largely by inflation, swap rates and Bank of England policy."
Rupert Collingwood, founder of The London Broker, cautioned: "While the deal is welcome news, it will likely take time for any benefits to be felt by homeowners and borrowers. Interest rates are just one of a number of systemic factors currently impacting UK housing, including the cost of goods, energy prices, tax, and the current UK Government's legislative agenda."
Emma Jones, managing director of Whenthebanksaysno.co.uk, struck a more optimistic tone: "The end to the war in the Middle East should be a real boost for borrowers. Inflation fears and the increased cost of borrowing have really dented demand in recent months. Swap rates will likely head south on the news, and we may see lenders start to shave their rates in the days ahead. The summer for the property market may yet be saved."
Riz Malik, Independent Financial Adviser at R3 Wealth, added: "If this deal holds and oil pricing continues to fall, we could see positive movements in fixed rate pricing by the end of the week. This is certainly the most positive announcement for mortgage pricing this year."
Chris Barry, director of Thomas Legal, suggested the war's conclusion may prompt buyers and sellers in the UK to make their move. However, Justin Moy, managing director at EHF Mortgages, struck a cautious note: "There have been too many false dawns thus far to take any announcement at face value, so while there may be a small ripple of improvement with mortgage rates, we shouldn't be hanging on for wholesale changes just yet."
