Mortgage submissions jumped sharply in the days following the escalation of the Iran conflict as borrowers rushed to secure deals before lenders repriced according to new figures from Stonebridge.
The mortgage and protection network said application volumes surged after swap rates moved higher in response to market volatility triggered by the US decision to launch military action against Iran at the end of February.
Between 28 February and the day before last week’s Bank of England base rate decision, submissions were 54.3% higher than in the same period a year earlier, as advisers worked extended hours to push cases through before mortgage pricing changed.
Rising swap rates, which lenders use to hedge against interest rate movements, led to higher funding costs and prompted a wave of product repricing across the market, despite the Bank of England ultimately voting to hold base rate at 3.75%.
RENEWED URGENCY
The spike in activity highlights how quickly global events can feed through into the housing market, with estate agents and brokers reporting renewed urgency among buyers looking to lock in borrowing costs amid uncertainty over inflation and future rate cuts.
Rob Clifford (main picture, inset), Chief Executive of Stonebridge, reckons the surge shows the value of advice during periods of market stress.
He says: “The way our members reacted was nothing short of extraordinary. There is no doubt their commitment and willingness to burn the midnight oil saved customers millions of pounds in unnecessary interest when you factor in the volume of business they would have written in just this short period.
“It’s a great example of how advisers champion borrowers, help them navigate a complex and fluid market, and give them an edge that they would lack if they were tackling all this on their own.”
