LONDON, April 8, 2026, 12:08 BST
Britain’s mortgage rates are likely to stay elevated even after a two-week U.S.-Iran ceasefire soothed markets on Wednesday, leaving households looking to remortgage facing a costly spring. Halifax said UK house prices fell 0.5% in March, an early sign that the jump in borrowing costs is cooling demand. 1
The truce has eased immediate pressure by dragging oil prices lower and reducing bets on Bank of England tightening, but lenders and brokers say that is more likely to slow increases than deliver quick relief. That matters because borrowers coming off cheap fixed deals are entering a market that has already repriced sharply, while some landlords are also dealing with new tax-reporting rules and rental-law changes in England. 2
Moneyfacts data carried by Press Association showed the average two-year fixed homeowner mortgage has jumped to 5.90% from 4.83% at the start of March, while the average five-year fix has risen to 5.78% from 4.95%. Moneyfacts has called it the biggest shock since the 2022 mini-budget, and Adam French, its head of consumer finance, said calmer markets should take off the immediate pressure even if rates stay higher “for some time yet.” 1
Borrowers are already changing tack. In Moneyfacts search data published on Wednesday, demand for two-year fixes rose 13% over a month, while five-year fixes lost share and remortgage borrowers cut searches for five-year deals by 15%, suggesting many households would rather wait out the shock than lock in expensive debt for longer. 3
Halifax put numbers on the strain. The lender said the average UK home price fell to 299,677 pounds in March and annual growth slowed to 0.8%, missing economists’ forecasts; rival Nationwide, by contrast, reported a sharp rise in March prices. Amanda Bryden, Halifax’s head of mortgages, said the market had lost “momentum” amid uncertainty over the Middle East conflict. 4
The broader housing picture was not weak before the shock. Bank of England data showed lenders approved 62,584 mortgages for house purchase in February, the most since November 2025, but RICS later reported buyer enquiries fell sharply as the conflict began and said rates could stay “higher for longer.” 5
For buy-to-let owners — investors who borrow to buy rental homes — the squeeze is wider than mortgage pricing. HMRC’s Making Tax Digital system, which requires quarterly digital updates, started on April 6 for landlords and sole traders with combined property and self-employment income above 50,000 pounds. England’s Renters’ Rights Act will end most no-fault evictions from May 1, and NRLA research published in March said 38% of single-property landlords described themselves as unlikely or highly unlikely to remain in the sector by the end of 2026. 6
That does not mean rents are about to spike everywhere. Zoopla said average rents for new lets were up 1.9% in the year to March and the number of homes available to rent had risen 11% from a year earlier, though supply was still 23% below pre-pandemic levels. 7
But the relief could fade as quickly as it arrived. Money markets now imply only one Bank of England rate rise this year, down from at least two earlier, while analysts say bond yields are unlikely to return to pre-war levels soon. If oil rebounds or the ceasefire breaks, swap rates — the market yardstick lenders use to price fixed mortgages — could rise again and trigger another round of repricing. 2
For now, the message to homeowners is awkward rather than reassuring: the panic in markets has eased, but remortgagers still face steeper monthly bills, first-time buyers are watching rates rather than rushing in, and smaller landlords have fresh reasons to think about selling. 1
