For those looking to borrow funds to buy a property or to remortgage, it has been a challenging time as they face typical rates edge towards 6%.

The impact of the conflict in Iran has taken its toll on the global and domestic economy, pushing up borrowing costs.

But there has been a glimmer of hope this week as average fixed rate borrowing costs saw their first week-on-week fall since February 27, a day before the conflict in the Middle East Began.

Peak mortgage rates

Adam French, Head of Consumer Finance at Moneyfactscompare.co.uk, says: “Markets have welcomed the reported reopening of the Strait of Hormuz, with two- and five-year swap rates falling back below 4% for the first time in a month.

Mortgage pricing may have peaked, particularly as we’ve seen the first week-on-week fall in average fixed mortgage rates since just before the conflict began.”

“This strengthens the view that mortgage pricing may have peaked, particularly as we’ve seen the first week-on-week fall in average fixed mortgage rates since just before the conflict began.

“However, recent volatility shows how quickly pricing can shift again. For borrowers, this should begin to feed through into mortgage rates with more lenders moving towards selective cuts on fixed deals in the coming days and weeks.

“That said, many lenders will want to see a sustained downward trend in funding costs before passing on more meaningful reductions, especially while the peace process remains fragile.”

Cautious buyers

However, it comes as Rightmove suggested that some buyers will be feeling cautious due to cost of living and mortgage rate increases.

The average asking price of a newly listed home rose by 0.8%, the equivalent of £2,929. in April to £373,971, a smaller increase than the long-term average for this time of year.