LF comments on mortgage rates predictions for The Sun

I'd manage expectations. The steady falls a lot of people were banking on don't look likely over the next few months. The Bank held rates in July, and tellingly three of its own members wanted them higher, with inflation expected to climb again towards the end of the year. That's just not the backdrop for cuts. What's actually nudging rates up right now is swap rates reacting to the Middle East and the oil price, rather than anything the Bank has done. Those moves are jumpy, and they can reverse as fast as they appear, so I'd expect volatility more than a clear direction. My honest instinct is broadly flat, with sharp moves both ways on the geopolitics, rather than the smooth decline everyone's hoping for. The real relief only comes when inflation is clearly beaten and the Bank starts cutting with conviction, and we're not there yet. So anyone hoping for a dramatic drop to arrive soon may be waiting a while.

This is as good as it’ll get over the next few months. I think the short term trajectory is pretty flat, the may be small incremental changes here or there, but nothing too exciting. But the way things are politically here and with conflict around the world, who knows what’s around the corner.

We're stuck in something of a holding pattern. As long as this uncertainty persists, rates are likely to stay higher – average 2- and 5-year fixes have crept back up towards the 5% mark having been closer to 4% earlier in the year. This will play out all over the world, but the UK is particularly vulnerable because our economy was already growing more slowly than hoped and because we import so much energy. Some damage is already done – even if the US-Iran conflict ended tomorrow, there would still be a lasting impact on our economy.

What's changed recently is that the Bank of England's Monetary Policy Committee is considering the risk of energy prices feeding into wider inflation. This could lead to a bank rate hold or even a rise in the coming months. Volatility is the defining feature of this market, and I expect that to continue while this geopolitical conflict remains unresolved. That's why, as always, aspiring homeowners should resist the temptation to try to time the market.

Mortgage rates have become hostage to geopolitics again. Earlier this year the Iran war pushed oil prices and inflation expectations higher, which fed directly into swap rates and forced lenders to reprice. We saw some relief when tensions eased, but renewed uncertainty has pushed borrowing costs up again.

The important point is that fixed mortgage rates do not simply follow the Bank of England base rate; lenders price heavily off swap markets, which can move within hours.

Over the next few months I expect volatility rather than a straight line up or down. If oil remains elevated or the conflict escalates, rates could stay under upward pressure. A genuine de-escalation, combined with softer inflation data, could bring swaps down quickly and restart lender competition.

For borrowers, this is not a market where I would gamble on tomorrow being cheaper. Secure something sensible now and review it if pricing improves before completion.

Predicting the precise direction of mortgage rates over the next few months would be unwise because pricing is responding to changing inflation expectations, energy costs and financial-market volatility, not just the Bank of England base rate.

The renewed Iran conflict has increased concern about oil prices and inflation, pushing up swap rates and the funding costs used to price fixed mortgages. That helps explain why rates can rise even while the base rate remains unchanged.

From a specialist property finance perspective, the important consequence is what this does to exits. Borrowers using bridging finance with the intention of refinancing onto a term mortgage need to test whether that exit still works at a higher rate. A small pricing change can affect affordability, available leverage and how long a borrower needs to remain on short-term finance.