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

Whether first-time buyers, in between homes or refixing, people tell of impact of higher mortgage rates on housing

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.

‘We had to pull out of buying a home’

Panos, 36, an executive sous chef, and his wife had put in an offer to buy their first house – a three-bedroom, in Hanwell, west London – 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,” says Panos. “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, who are keen to start a family, will now continue to rent until mortgage rates improve.

“There is so much uncertainty,” Panos says. “I have been renting for more than 10 years and I was really looking forward to becoming a homeowner in 2026, but it will have to wait. I can’t believe that something happening on the other side of the world is affecting England, and everyone in the world.”

‘We took a gamble and lost’

Edward, 47, who is married with one son and lives in Staffordshire, says the family are still renting after selling their house. A combination of mortgage rate increases and fewer suitable properties on the market has scuppered their goal to buy.

“We were betting on interest rates going down, which seemed an almost certainty at that time,” says Edward, a producer. “Then, when things couldn’t get any worse, the war happened, and mortgage rates just skyrocketed day by day.”

They had sold their house last October, and gave themselves a target of six months of renting to find a new home to buy. However, halfway through their tenancy, they were served a section 21 eviction notice as the owner’s personal circumstances dictated they needed the house back.

“We still hadn’t found a house to buy as the usual spring uptick in listings was yet to happen,” says Edward. “The rental market also started to dry up.”

In mid-April, they found another place to rent. Edwards says it is more expensive and smaller than first place they rented, but there were slim pickings.

With the rise in mortgage rates, the family have had to dramatically revise their expectations of what their next house will be. Now they are looking at properties they would have previously rejected.

“What houses we could view to buy seemed to be having a rush on from other desperate buyers – even a week’s delay to view meant a house that was affordable quickly became unaffordable,” says Edward. “No one seems to be listing at the moment.

“We took a gamble and lost.”

‘I’ve pushed the repayment date to 2049 … I’ll be 72’

Jonathan, 49, an academic and single parent who lives in Leicester, says he is worried he has had to push the repayment date of his mortgage “well beyond” his retirement.

In January, he was in the process of refixing his mortgage on his two-bedroom terrace house and had a rate of 3.6% agreed for two years, but at the beginning of February he was told that after checks the rate would need to rise to 3.97%. However, at the beginning of April, Jonathan was informed that the bank had changed its borrowing criteria and had withdrew its offer.

“I was contacted by my broker that day, who said I no longer qualified for this mortgage with them,” he says. “My broker said he didn’t know why it had been withdrawn – it could be the loan-to-value rate, or the fact that I have some additional borrowing to pay for house improvements.”

Jonathan has now secured a rate of 5.2% fixed for two years, costing him an extra £150 a month, and hopes that by the time he needs to refix again the rates will be better and he’ll be able to adjust the repayment date to before he retires.

“I have pushed the mortgage repayment date to 23 years or 2049, he says. “I will be 72 then.”

‘I know I’m not the only person experiencing this’

Grace*, 27, had a mortgage deal agreed in principle for a house in late January to early February, but when that purchase fell through, she was advised to keep the deal and look for another property in Northamptonshire, although things did not go to plan.

“For the first house, I was offered a five-year fixed rate at 4.09%,” she says. “I was borrowing £174,000 and putting down a deposit of £47,000.”

In March, Grace, who works for the NHS, found a three-bedroom house she wanted, and was advised by her mortgage broker she could borrow the upper limit of the agreement, which was £188,000, in principle.

However, during Easter, the bank said she needed a new mortgage deal “because the sale would not go through in time”, something her mortgage broker disputed. The bank then said the most it could offer was a £134,000 mortgage.

“I just didn’t have another £50,000 to add on to the deposit,” she says. “I panicked.”

The bank said the decision was down to affordability, but Grace says her circumstances hadn’t changed. It then said it was due to her credit score. But Grace said her score was “good”.

Her mortgage adviser appealed against the decision. The appeal was accepted, with the bank stating it would reduce the offer by £18,000, rather than £54,000.

That offer is 5.2% on a £170,000 mortgaged fixed for five years. Grace is paying £235,000 for the property and putting down a £67,200 deposit.

“I know I’m not the only person experiencing this, but it feels a bit unfair,” she says. “My friends who are in their 20s and early 30s tell me they’ve stopped looking for houses because of issues with mortgages. They’ve given up on buying a house until things cool down.”

* Name has been changed