Hate's Rates

Mortgage rate rises. Three words guaranteed to make every agent in the country reach for something stronger than a cuppa.

Six weeks ago, the average two-year fix sat at a semi-reasonable 4.83%. Today? Uswitch puts the average two-year fix at 5.83% as of this week - and the trajectory doesn’t exactly scream “don’t panic.”

The reason's obvious - a war nobody at the Bank of England, or the property industry, had pencilled into their 2026 plans.

When the US and Israel launched military action against Iran on February 28th, it didn’t just send oil prices through the roof - it sent swap rates soaring with them. And when swap rates go up, lenders don’t hang about. Over 1,500 mortgage products have already been yanked from the market. The availability of residential mortgages has shrunk by 21%.

A fifth of the entire market, gone.

And there’s something weird happening in the rate structure that’s worth paying attention to, too. Two-year fixes at 95% LTV are now more expensive than five-year fixes - 6.1% versus 5.93%. That’s inverted. Normally you pay more for longer certainty. When it flips the other way, it tells you something important: the market thinks the pain is concentrated right now. Lenders are charging a premium for the next two years because they believe this is the expensive bit. The five-year rate is cheaper because they’re betting things will have calmed down by then. In other words, the people pricing the money think this spike is temporary. The question your buyers need to ask themselves is: can they afford to wait it out?

Bloomberg reported this week that British homebuyer demand has “plunged.” Not softened. Not eased. Plunged. New listings are up on last year - over 441,000 in the first twelve weeks of 2026 - but with fewer buyers able to transact, stock is starting to sit.

And as a result, gazundering is back and it’s spreading fast. Simon Nosworthy, Head of Residential Conveyancing at Osbornes Law, has claimed it now affects 90% of deals. Quick Move Now’s data puts it at a more-likely one in five. Whichever you choose to believe, the stat that should worry agents and vendors most is this: of sellers who get gazundered, 56% cave and accept the lower price. Only 28% hold firm and still complete at the original figure. That’s ammunition you need to be giving your vendors right now - if they’re not priced right from the start, they’re sitting ducks.

Nick Leeming, chairman of Jackson-Stops, captured the industry’s mood when he acknowledged that the geopolitical upheaval has made any earlier predictions about rate reductions in 2026 essentially meaningless. Translation: every forecast made in January or February is now in the bin.

So what do you do? The agents who’ll come through this in decent shape are the ones being brutally honest with vendors right now. Price it right from day one. Manage expectations. Don’t promise the moon to win the instruction and then spend four months chasing reductions while gazunderers prowl. The market has shifted - those who acknowledge this fastest will be the ones still standing when rates eventually come back down.

The question is: how long will that be?

No one - not even Trump himself - knows. If the Iran conflict de-escalates, swap rates should ease and lenders will start putting products back on the shelf. That's what every single participant in the property market right now is rooting for.

But if it doesn’t? Start planning now. Look at each and every one of those costs, in particular, and start reminding yourself what's in the three buckets - essential, nice-to-have and purely decorative. You may have done this exercise at the beginning of the year - it is likely to be very different now.

And technology has moved on too; Agentic AI, the kind that you give jobs to and it goes away and completes them, is now much more reliable. Play around with Claude Cowork particularly - and use this weird market to your advantage by learning new skills. Ask it about Agentic AI, drop in some of your most gnarly challenges and see what it comes back with. You're unlikely to be disappointed.

It's trite to bang on about change being permanent, focusing on the things you can affect rather than those you cannot, preparing for the worst and hoping for the best - but these are all true and useful ways forward.

Hate's rates could end tomorrow. But they could carry on for a long time yet as well - and, bearing in mind the reliability of those involved - that's what you need to be thinking hard about right now.