BROKERS are calling for a 30-day mortgage reservation at the stage of “agreement in principle” (AIP) as lenders pull rates with mere hours of notice amid the chaos of the Iran war.
The UK mortgage landscape is currently weathering its most volatile period since 2022.
While the conflict in the Middle East remains geographically distant, the economic fallout is hitting British homeowners and prospective buyers with startling speed.
The primary driver of this instability is oil. With global prices surging past $115 a barrel, energy-driven inflation has fundamentally shifted the outlook for the Bank of England (BoE).
Hopes for a series of BoE base rate reductions have largely evaporated. The focus has shifted toward holding or even increasing rates to prevent an inflationary spiral.
Swap rates, the mechanism used by lenders to price fixed-rate deals, have spiked in response to geopolitical uncertainty. This has led to the “Great Withdrawal,” where over 1,500 products were pulled from the market in a single fortnight this March.
Lenders are currently pulling deals with mere hours of notice, causing property chains to buckle under the pressure of “panic-submitting” and incomplete applications.
Lenders are retreating into a ‘Wild West’ of panic withdrawals
Darryl Dhoffer, Founder at Bedford-based The Mortgage Geezer, praised Nationwide for allowing brokers to reserve a mortgage rate for 90 days at the AIP stage.
He is calling for all High Street lenders to adopt a minimum 30-day rate lock at the AIP stage.
Darryl says this will prevent the “domino effect” of collapsed deals when rates expire mid-transaction and empower buyers to make offers based on guaranteed costs rather than speculative figures.
He added: “The ‘Blink-and-You’ll-Miss-It’ lending environment is a disgrace. As oil hits $115 per barrel and 1,500 mortgage products vanish in a fortnight, lenders are retreating into a ‘Wild West’ of panic withdrawals.
“Pulling deals with hours’ notice isn’t managing risk, it’s sabotaging the British dream of homeownership. Nationwide’s 90-day AIP reserve proves stability is possible. Why is the rest of the High Street hiding behind swap rate volatility instead of protecting customers?
“I am demanding a mandatory 30-day rate reserve at AIP. We need to stop the ‘firefighting’ and start stabilising property chains. If Nationwide can offer a safety net, the silence from other major lenders is deafening. It’s time to stop the panic and start lending with integrity.”
Charles Hart, Business Principal at Milton Keynes-based LionHart Mortgages & Protection, also praised Nationwide for its model.
He added: “Not only do last-minute changes cause clients financial harm, but it takes a huge strain on their mental health at a time where we are all trying to be more understanding and accommodating of clients’ vulnerabilities. Not only could they face higher rates for not making quick decisions, they may also end up with the wrong advice.
“Nationwide has, quite frankly, cleaned up recently, and more power to them. Their progressive and supportive 90-day rate reservation has not only protected clients and supported advisers, but it has probably also earned them a fine slice of the proverbial pie too.
“Well-deserved for a proactive and market challenging initiative. The suggested 30-day model is a fantastic idea to ensure the best customer outcomes and ensure that property transactions have less chance of falling through, but which lenders are brave and ambitious enough to pioneer this?”
Brokers are being forced into constant firefighting
Michelle Lawson, Director at Fareham-based Lawson Financial, said some stability is needed during chaotic times.
She added: “We need to see a shift in how lenders hedge their funds to allow this which will be quite a change for the industry. We need to learn and progress from the events over the last six years and, if we are going to be running on instability in the future, we need to be able to provide certainty and sanity.
“There are so many benefits for all for product reservation – we know it can be done as some lenders do it. Reserve the product, have a period of time to finish the submission and provide documentary evidence and it will improve the accuracy of the applications and stop spikes in business. It also takes away the pressure for borrowers to make heavy decisions in such chaotic times.”
Shaun Sturgess, Director at Swansea-based Sturgess Mortgage Solutions, said brokers are “being forced into constant firefighting”.
He added: “A mandatory 30-day rate securing period at AIP stage would be a huge step forward for the mortgage market. The frequency of recent rate withdrawals and repricing has been excessive, placing immense and unnecessary strain on brokers and clients alike.
“Brokers are being forced into constant firefighting, while borrowers are left making major financial decisions with little certainty from one day to the next. That is not a fair or sustainable way for the market to operate. If some lenders, such as Nationwide, can offer meaningful early-stage protection, it is entirely reasonable to question why others cannot.
“Lenders may argue volatility justifies flexibility, but too often that flexibility appears to protect margins while consumers carry the risk. A 30-day reservation period would improve confidence, reduce panic-submitting, and create a more stable, transparent and fairer lending environment.”
Photo by Johannes W on Unsplash.
