Why is it harder for first-time buyers to buy in 2026?

For first-time buyers in 2026, the property market is in stark contrast to when previous generations bought their first homes.

The average first-time buyer in 1960 paid a deposit of just £595 (roughly £12,738 today)^[1] compared to an average of £53,424 in 2024^[2].

A recent report by Skipton^[3] found that just one in eight potential first-time buyers can buy a home in their local area, and of this same group, 80% have insufficient deposit savings to get onto the property ladder where...

Global events can often feel distant and disconnected from everyday financial decisions, but the reality is that the two are closely linked. The recent escalation of tension in the Middle East has raised fresh questions in financial markets about inflation, energy prices and the path of interest rates. For those people currently applying for a mortgage, or thinking about doing so, that uncertainty could matter more than it first appears.

Mortgage rates are heavily influenced by expectations about future Bank of England (Boe) interest rates. Over the past year there had been growing optimism that interest rates may start to fall in 2026 as inflation gradually eased. However, geopolitical instability has the potential to complicate that picture.

Conflict, inflation and interest rates

Conflict in energy-producing regions can quickly affect global oil and gas prices. If energy costs rise again, it can push inflation higher or slow the pace at which it falls. For banks, including the BoE, that makes cutting interest rates a lot more difficult. Markets may begin to price in a longer period of higher borrowing costs, which directly feeds into mortgage pricing.

Why mortgage rates have been edging up again

We have already seen mortgage rates edge upwards again in recent weeks as lenders respond to shifts in swap rates and wider economic uncertainty. Alongside rising rates, we have also seen a number of lenders pulling products, either to relist at higher rates or removing completely. For borrowers who had been hoping that cheaper deals were just around the corner, the global backdrop is a reminder that the path to lower rates is unlikely to be perfectly smooth.

What this means for people applying now

For those currently going through the mortgage process, this environment underlines the importance of acting with a degree of urgency. Mortgage offers are typically valid for a set period, and securing a deal earlier can help protect against further increases in rates if market sentiment shifts again. Waiting in the hope that rates will fall quickly carries an element of risk when the economic outlook is being shaped by unpredictable global events.

Keeping perspective in uncertain times

At the same time, it’s important not to panic. Mortgage markets are influenced by a wide range of factors, from inflation data and wage growth to central bank decisions and global economic trends. A single geopolitical event will not determine the direction of rates on its own. However, it can add another layer of uncertainty at a time when borrowers are already navigating a complex economic environment.

For prospective homeowners, the key takeaway is that global events do have local consequences. The situation in the Middle East may feel far removed from the UK housing market, but its impact on inflation expectations and interest rate forecasts can ultimately shape the deals available on the high street.

In uncertain times, good advice and timely decision-making become even more important. For anyone applying for a mortgage today, staying informed and moving decisively when the right deal appears could make a meaningful difference to the cost of borrowing over the years ahead.

YOUR HOME MAY BE REPOSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

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At first glance, things like coffee and chocolate might not seem to have much to do with mortgages. But as you might have noticed, both have become noticeably more expensive in recent months.

Don’t worry, this isn’t another lecture about skipping your morning latte or Starbucks trip to save for your house deposit. Instead it’s a call to look behind those higher prices where you’ll find a bigger story about inflation, which has a direct impact on the mortgage deals available to you.

From everyday treats to global markets

Coffee beans and cocoa are traded on international markets, and their prices are influenced by factors like climate change, crop yields, transport costs and global demand.  When supplies are disrupted, as has happened recently with poor harvests in key producing countries, prices rise sharply. For consumers, that means higher costs at the supermarket or coffee shop.

The link to inflation

When everyday goods like food, energy and raw materials go up in price, it feeds into inflation – the measure of how fast the cost of living is increasing. Food prices, in particular, remain one of the biggest contributors to overall inflation.

Higher inflation puts pressure on the Bank of England to act, since one of its main roles is to keep inflation close to its 2% target.

Why this matters for mortgages

When inflation is high or expected to rise, the financial markets anticipate that the Bank of England will hold interest rates higher for longer. This expectation pushes up “swap rates” - the rates at which banks lend to each other.

Swap rates play a big part in determining the cost of fixed-rate mortgages, so if they climb, so does the cost for lenders to borrow money. This means they are less able to offer cheaper deals.

In other words, the higher cost of your flat-white or favourite chocolate bar can ripple through the economy and ultimately influence the rate you are offered on your next mortgage.

What you can do

The good news is that while global markets are outside our control, you can prepare for what’s happening closer to home. If your fixed rate is coming to an end, speaking to an adviser early can help you secure a new deal in advance and avoid being moved onto a higher Standard Variable Rate (SVR). An adviser can also guide you through all your options, whether you’re set to remortgage or looking to buy.  

One of the key benefits of using an adviser for this process is that they have a much wider choice of mortgage options available to them – compared to your bank or even your own online search. This means you can be reassured that you’re accessing competitive options that are best suited your needs and circumstances.

Coffee and chocolate may be everyday luxuries, but their rising costs are a reminder of how interconnected our finances really are. Understanding those links, and planning ahead, is the best way to stay one step ahead of changes in the mortgage market.

YOUR HOME MAY BE REPOSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

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That’s where financial advice can make all the difference.

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What does an interest rate cut mean for mortgages?

Every six weeks or so, all eyes are on the Bank of England and its Monetary Policy Committee (MPC) – the group that decides whether interest rates will be increased, held or cut. How they choose to act has an impact on how much it costs banks to borrow money and what rates they can offer to savers and borrowers.

With all this in mind, what does an interest rate cut actually mean for mortgage holders and for those weighing up their options as they come to buy or move?

Will my mortgage now ...