UK households should expect a 'positive' mortgage rates update 'by the end of the week' following a significant geopolitical development. Mortgage brokers and property experts have welcomed the end of the war in the Middle East, describing it as the best news for mortgage pricing this year and saying 'we could see positive movements in fixed rate pricing by the end of the week'.
Nationwide Building Society Announces Rate Cuts
Nationwide Building Society has already announced a series of rate cuts across its fixed mortgage rate range. From tomorrow, June 16, rates will reduce by up to 0.28 per cent across two, three, five and ten-year fixed rate products.
US President Announces Deal with Iran
Last night, US President Donald Trump announced on the Truth Social network: '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 removed, the Strait of Hormuz will be reopened and the deal will be signed in Switzerland on Friday.
Expert Reactions
Jamie Elvin, director at 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. It's encouraging for the housing market, but it's not a silver bullet.'
Riz Malik, independent financial adviser at Southend-on-Sea-based R3 Wealth, said: '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. The 'Trump Tax' that has been added to many household budgets could be diminishing. We are not out of the woods yet, but this is certainly the most positive announcement for mortgage pricing this year.'
Rupert Collingwood, founder at The London Broker, a property consultancy, also said the property market would not be transformed overnight: 'While the deal is welcome news, it will likely take time for any benefits to be felt by homeowners and borrowers, meaning that the immediate impact on the UK housing market will likely take time to trickle through. However, interest rates are just one of a number of systemic factors currently impacting UK housing, including the cost of goods, energy prices as well as tax and the current UK Government's legislative agenda. Whilst we must hope the easing of traffic through the Straits of Hormuz will help to lower the costs of goods and reduce energy prices, we need to look closer to home and for our own Government to address the very real domestic factors currently causing a drag on property transaction levels and prices.'
