Iran war causing mortgage market turbulence
March 16, 2026 by Brendan O'Neill
Mortgage Advisors
The Iran war is leading to considerable turbulence within the mortgage market, and the Prime Minister has warned that it will continue as long as the conflict does.
Keir Starmer has made it clear in a statement that the war will have repercussions for everything from mortgages to interest rates and inflation. This is already starting to be felt, as hopes fade of a base rate cut by the Bank of England. Meanwhile, mortgage lenders are reacting to financial market volatility by taking their fixed-rate loan ranges out of circulation and putting up rates.
The rate increases are affecting mortgages of all types, from remortgage to purchase loans. Some building societies are also putting fixed rate deals up due to rises in their financing costs caused by the war.
However, the market segment that has experienced the most dramatic effect is specialist lending. Here, many fixed rate mortgages have been withdrawn by lenders with almost no warning. Other specialist lenders are giving advisors short deadlines to get applications in if they want the mortgage on its current terms.
The overall lending situation will concern mortgage advisors, but the estate agent Knight Frank has urged caution. Its global research head Liam Bailey told Mortgage Strategy that banks were reacting defensively and that matters would calm down when the situation becomes more stable. He then said:
“Nevertheless, that could take time and rates are unlikely to return to previous lows while the volatility in energy prices continues.”
Advisors with CeMAP training will want to get deals over the line while existing terms are available.
Written by
Brendan O'Neill
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