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What war in Iran could mean for mortgages/ how it will affect Brits

ended 23. June 2025

The media is asking what experts think the Iran war could mean for mortgages and how it could affect Brits. Any other potential different angles of how Brits will be hit if it continues to escalate. 

  • Could it affect the Pound?
  • Could it affect mortgages? 
  • Could it affect petrol prices?
  • What else could if affect for Brits?

Views ASAP please.

7 responses from the Newspage community

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Katy Eatenton
Mortgage & Protection Specialist at Eatenton Finance
If oil prices spike and stay high as tensions in the Middle East escalate, that could have an inflationary impact and see prices stay higher for longer. The Bank of England's focus is reducing inflation to the 2% target and this could mean that any interest rate cuts in 2025 are delayed. That would mean mortgage rates could stay elevated, which is not good news for mortgage holders and the wider property market. Prices at the pumps would also increase, further adding to the financial pressure on Brits.
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Andrew Montlake
CEO at Coreco
Brits could feel the pain of events unfolding in the Middle East. Petrol prices will climb if oil prices start to spiral and inflation, already proving stubborn, could start to rise further. The UK economy is in a difficult place, with the economy contracting in April, retail sales down and the jobs market under real pressure. Rising inflation could see the UK fall prey to stagflation, which we categorically do not want to see. For mortgage holders, rising inflation due to higher oil prices is not good news as it means the Bank of England may not be able to reduce the base rate to give households the breathing space they need. What the events in the Middle East show are how connected the world is, and the rapid ripple effects of geopolitical developments across economies globally.
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Harry Mills
Director at Oku Markets
Geopolitical risk is now a key driver of FX volatility, and the Iran conflict has the potential to trigger a broader risk-off move in global markets. The pound dipped by more than half a per cent against the US dollar since the market reopened after the weekend and the news of the United States' bombing of Iran. Should tensions escalate further, the pound will likely lose ground across the board as investors seek safe havens such as the dollar, Japanese yen, Swiss franc, gold, and government bonds. Sterling is seen as a relatively riskier currency, and certainly not as a safe haven, a status underlined by recent poor economic data and the market's lack of faith in the Chancellor's fiscal plans. A weaker pound could feed through into higher inflation via more expensive imports, particularly energy. If the Bank of England feels compelled to keep interest rates higher for longer to anchor inflation expectations, this could delay or even reverse expected mortgage rate cuts.
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Ben Perks
Managing Director at Orchard Financial Advisers
Recently we’ve seen how conflict can impact the cost of living in the UK. The price of petrol will almost certainly rise, the rise in this overhead can lead to price rises on everything that’s transported. It’s a waiting game to see how markets will react, but as things in the Middle East heat up, it’s likely to cause volatility, which is not great for mortgage rates. These leaders need to use some diplomacy, for both moral and economic reasons.
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Tony Redondo
Founder at Cosmos Currency Exchange
Even without a closure of the Strait of Hormuz, current tensions threaten UK living standards. The financial markets will remain on edge, all too aware of the UK’s limited influence with Iran. At a time when the economy is crying out for relief and an interest rate cut would be a welcome boost to a flatlining UK economy, oil-driven inflation could easily delay Bank of England rate cuts, squeezing borrowers. The pound, now seen as a risk-based currency, could weaken, raising import costs for food and travel. Petrol prices may rise 5-50p per litre, inflating transport and goods prices. Energy bills could jump £150-£220/year, worsening the cost-of-living crisis. Add in security fears and community tensions if the UK backs US actions, and we could be in for a long, hot summer.
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David Stirling
Independent Financial Adviser at Mint Wealth
Any geopolicitcal shock, such as war in the Middle East, is likely to drive oil prices up and therefore energy costs for Brits. The knock-on inflationary pressure will make the Bank of England less likely to cut rates and therefore keep our mortgage costs elevated. The immediate impact could be higher monthly payments for those on variable rate mortgages if rates go up, with new buyers facing more expensive borrowing costs and squeezed affordability and overall a slowdown in the housing market.
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Pete Mugleston
Mortgage Advisor & Managing Director at onlinemortgageadvisor.co.uk
The primary concern most people should have is that the conflict in Iran leads to higher inflation. As a key oil supplier, prolonged conflict in Iran will lead to an increase in oil prices. This will affect everything from petrol costs, transport fares, and inflation, making the cost of living even more challenging. Higher inflation will mean the Bank of England will have to delay any rate cuts, which will keep mortgage rates higher for longer. The war could also spook markets if it drags on and weaken the Pound, driving up import costs. The economic shock from this conflict could affect everything from household bills to borrowing power for homeowners.