Editor's note: This brief was summarised by The Property AI Newsroom from a report by Guardian Property. Read the original article for full details.

UK Buyers and Renters Face Mortgage Struggles After Iran War Begins

Britons seeking to buy or rent homes have faced increased mortgage rates and market uncertainty since the Iran war began at the end of February 2026. Some buyers have been forced to abandon purchases, while renters have encountered higher costs and fewer options.

Prospects for UK interest rate cuts in 2026, which were widely expected at the start of the year, changed rapidly after the conflict began. The Bank of England is now expected to raise rates at least once this year, with mortgage costs remaining higher for longer.

A reader in Northamptonshire reported having a mortgage deal agreed in principle in late January, but the process did not go as planned after the war began. Panos, an executive sous chef, and his wife had put in an offer on a three-bedroom house in Hanwell, west London. The interest rate on their five-year fixed mortgage increased from 4.18% at the beginning of February to 5.22% by April. This change would have raised their monthly payments from £2,600 to £3,100, making the purchase unaffordable for them. As a result, they decided to continue renting until mortgage rates improve.

Edward, a producer from Staffordshire, also described difficulties. After selling their house in October, his family rented while searching for a new home to buy. They expected interest rates to fall, but after the war began, mortgage rates increased and suitable properties became scarce. During their tenancy, they received a section 21 eviction notice and had to find another rental, which was more expensive and smaller. The rise in mortgage rates forced them to lower their expectations for their next home, and competition among buyers made affordable properties harder to secure.

These experiences highlight the challenges faced by both buyers and renters in the UK property market since the start of the Iran war, with higher mortgage rates and limited housing options affecting decisions and affordability.