Mortgage market update | March 2026

Life has busy seasons, and this is probably one!

Between escalating conflict in Iran, inflation concerns creeping back into headlines, lenders pushing higher LTV products, and yesterday’s Spring Budget, there is a lot for property owners and ‘want to be’ owners to digest.

Here's what’s been happening this month.

War in Iran: Why It Matters for Your Mortgage

Whenever conflict escalates in the Middle East, markets immediately focus on one thing: oil.

If oil prices rise sharply, that feeds into:

• Higher fuel costs

• Increased transport and production costs

• Sticky inflation

  
  

And if inflation proves stubborn, the Bank of England becomes cautious about cutting rates too quickly.

Over the past fortnight we’ve seen swap rates (which underpin fixed mortgage pricing) move slightly higher as markets price in that risk.

What this means for you:

• A rate cut is still expected this year

• But they may be slower and more measured

• Lenders are reacting cautiously rather than aggressively

  
  

We are not back to 2023 panic as Russia invaded Ukraine. But we are also not in a “race to the bottom” rate environment.

Santander Launches a 98% Mortgage

Santander has launched a 98% Loan-to-Value mortgage called ‘My first mortgage’. Did you guess, it’s for first time buyers? 

This means some buyers only need a 2% deposit if they want to buy an existing house.

It’s the highest LTV product from a well-recognised high street bank in years.

Key features:

• Minimum deposit £10,000.

• Maximum loan £500,000

• Lending up to 5.5 times income

Banks do not offer 98% mortgages unless they believe the market is stable – good news all round.

Lending at Its Highest Since the Pandemic

Principality Building Society has followed other lenders by increasing their interest-only options. They have moved to a maximum of 75% LTV, provided you have £150k in equity and a max term of 25 years. It is great to have another lender offering this flexibility for clients who want more control over their monthly cash flow.

Spring Budget Watch

Yesterday’s Spring Budget was light on action. Instead, the government’s focus remains on:

• Economic stability

• Inflation control

• Gradual growth

From a mortgage perspective, the key takeaway is this: Stability.

For Buyers, if you are waiting for a “crash” in the market alongside interest rate declines, that feels unlikely in the short term, especially with global uncertainty pushing inflation risk back into the picture.

For Sellers, more buyers are active, butt affordability still matters.

If oil-driven inflation delays rate cuts, buyers will stay payment-sensitive. Pricing correctly from day one is still the difference between selling and sitting.

My Final Thought

Markets dislike uncertainty. But they adapt quickly.

If you are waiting for a perfect moment with perfect clarity, you will be waiting forever.

Make decisions based on your circumstances, not headlines.

Risk warnings

Your home may be repossessed if you do not keep up repayments on your mortgage