Lenders have pulled back from aggressive pricing – and brokers are reading the signals
The Bank of England held the base rate at 3.75% in April, with the Monetary Policy Committee voting eight to one to hold – but the market is under no illusions that the calm will last.
The conflict involving Iran sent swap rates surging in February, and while lenders have since pulled back from their most aggressive pricing, the next MPC decision on 18 June 2026 still carries genuine uncertainty.
Traders are not pricing in a rise at the June meeting, and lender behaviour over the past month appears to confirm that view. Many have been quietly holding or trimming their rates rather than pushing higher – a signal Craig Head, director at Mortgage Required, told Mortgage Introducer he’s seen before and knows how to read.
"We've had a recent trend over the last month where lenders have been consistently holding or reducing their rates, which from experience tells us they're not expecting an imminent base rate increase at the next meeting," he said. "It looks to us like the Bank of England are holding steady and have decided there's not enough data that would make them have to put the base rate up immediately."
Trackers back in demand
That assessment is shaping how Head's clients are approaching the market. Tracker mortgages, widely avoided during the rate-hiking cycle, are now selling in greater volumes at Mortgage Required than they have for some time.
"The general consensus is that a tracker is a good way for clients to go, we're doing more trackers than we have for a very long time," he said. "Clients seem quite comfortable with being linked to the base rate at the moment."
Head acknowledged the picture could shift. Back in March, lenders had been pricing in as many as four base rate increases before year-end – an assumption that has since been wound back considerably, with most now modelling two to three. Head's own view is more conservative, and he is sceptical the Bank will need to act as aggressively as some had feared when the conflict first rattled financial markets in the spring.
"I personally think maybe no more than one increase – and possibly none if they can avoid it," he said. "I think they would like to avoid it, but it's just whether their hand is forced."
He added that if economic data over the next two to three months proves less damaging than initially feared, the MPC may opt to hold rates flat for the remainder of 2026. The Bank has noted the outlook for inflation remains uncertain and will depend on the scale and duration of the energy price shock, as well as how businesses and households respond – a caveat that leaves plenty of room for the picture to deteriorate. The Bank of England's February 2026 rate decision, a five-to-four vote to hold, illustrated just how quickly that balance can tip.
Uncertainty is where brokers earn their keep
On the question of a resolution to the Middle East conflict, Head offered a perspective that will resonate across the industry. A deal, he said, would clearly benefit borrowers and stimulate transaction volumes. But periods of market turbulence, he argued, are precisely when professional mortgage advice proves its worth – and when clients are most receptive to it. In his experience, a straightforward market is a far more uncomfortable place for a broker to operate than a volatile one.
"From a mortgage market point of view, a deal would be great," he said. "If that meant rates settled and came down, hopefully the purchase market would pick up even further."
That underlying demand is already showing through. The Bank of England's April 2026 Money and Credit data showed 65,945 mortgage approvals for house purchases – the highest since January 2025 and well ahead of the economists' forecast of 62,000 – evidence that buyers are pressing ahead despite the uncertainty rather than waiting for clearer skies. For Head, that resilience is no surprise. Clients have assessed the situation, weighed their options, and made a decision. Brokers, meanwhile, have never been busier.
"When there's a lot going on in the market, we're probably needed more than ever – and clients appreciate that advice a lot more than they do when it's just a very straightforward market."
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