Lenders and banks have pulled hundreds of mortgage products within 48 hours of the outbreak of war.
Property chains face ‘collapse’ as UK housing market left in crisis from Iran
UK house sellers are feeling despair – as the Iran war knocks confidence in the housing market. Lenders and banks have pulled hundreds of mortgage products within 48 hours of the outbreak of war.
The mood is one of “fear and uncertainty”, says Andy Wicking, the director of the Charles Bainbridge estate agency. “It’s very nervous. There are lots of anxious people,” Wicking said.
“The chains falling down at the lower end, they’re the really cautious ones,” Wicking says. “And funnily enough, they’re the ones that the market really, really needs.”
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“The longer a chain goes on, the more buyer’s remorse and fear sets in,” he says. “It’s very important to get the offer, get the deal done, get it across the line quick.”
“The competition and the confidence isn’t there now,” Wicking says. One home seller told the Guardian they have been trying to sell for three years – but viewings have “dropped through the floor since Iran.”
They told the paper: “It’s not the price of our property, it’s the lack of people able to proceed. The damage had already been done, and then we got this situation. Everybody’s sitting on their hands.”
Heartbreakingly, two chains have already collapsed. An independent broker, meanwhile, said: “We went from pricing in two or three interest rate cuts this year to two or three hikes.
“That’s a huge swing within a month.” Mortgage rates have already risen by more than 1 percentage point since the start of the war in Iran.
The lowest fixed rate deals have gone from around 3.5 per cent in February to around 4.75 per cent in a matter of weeks.
While most households on fixed rate deals are protected from this volatility, some 1.8 million homes are due to remortgage this year – and many of these are likely to be rolling off very low rates taken out five years ago at between 1 and 2 per cent.
