It feels unfair': the Britons struggling to get a mortgage since Iran war began

Prospects for UK interest-rate cuts in 2026 were reduced after the Iran war began in late February, increasing inflation concerns. The Bank of England is now expected to raise rates at least once during the year, keeping mortgage costs higher for longer. A housebuilder leader described the period as the most challenging for first-time buyers since the 2008 financial crisis. A couple in west London withdrew from buying after their mortgage rate increased following the conflict, causing monthly payments to rise substantially. They decided to continue renting due to affordability constraints and uncertainty. Another family in Staffordshire also remained in renting after selling their previous home, reflecting ongoing pressure from mortgage-rate changes.

"Prospects of cuts in UK interest rates in 2026, which were widely expected at the start of the year, were rapidly extinguished when the Iran war started at the end of February. The renewed threat of inflation means the Bank of England is now expected to raise rates at least once this year, with mortgage costs staying higher for longer."

"The boss of Britain's largest housebuilder said on Thursday it was the most challenging time to be a first-time buyer since the 2008 financial crisis. We asked people about their experience of housing and mortgage rates after the start of the conflict in the Middle East."

"Panos, 36, an executive sous chef, and his wife had put in an offer to buy their first house ... but the interest rate on the mortgage they going to take out jumped after the start of the war. When he spoke to his mortgage broker on 13 April, he was told the original rate of 4.18% on a five-year fixed rate that had been available at the beginning of February was now 5.22%. I asked the broker to explain this to me in plain English, and he told me our payments would rise from 2,600 a month to 3,100."

"We could not afford this it would mean all my wages would go into paying for the house, and we would have to rely on my wife's wage, which is not very high. It couldn't be done. We were heartbroken as we had to pull out. The couple ... will now continue to rent until mortgage rates improve. There is so much uncertainty, Panos says."

Read at www.theguardian.com