The Intermediary – February 2026 - Flipbook - Page 44
RESIDENTIAL
Opinion
Offering reassurance
in a time of economic
uncertainty
A
t Leeds Building
Society, we’re driven
by our purpose of
geing more people
into bricks and
mortar that they
own. We know that affordability
remains the biggest barrier to
homeownership. The latest data
released by the Office for National
Statistics (ONS) on UK house prices
showed that property prices remain
high, with annual growth of 2.5%
to the end of November, which is
encouraging for the market overall.
It is interesting to note that there
continues to be a divergence in the
relative strength of property markets
in the North of England and the South
East and London – with average house
prices rising by 7% in the North East
over the last year but falling by 1% in
the nation’s capital.
Other recent data suggests that
buyers are being more cautious, but
importantly they haven’t disappeared
altogether, and are starting to return
to the market following the removal
of pre-Budget uncertainty. For
first-time buyers (FTBs), continued
collaboration across the mortgage
industry remains vital, ensuring that
aspirational homeowners continue to
receive the support they need.
Market caution
The first weeks of 2026 have been
dominated by unseling headlines
and it’s understandable that many
may be worried about how geopolitical
uncertainty could affect interest rates
and their personal finances.
Headlines around the potential
for higher US tariffs or a full-blown
trade war between the EU and the US
returned in the middle of January,
this time linked to UK and European
support for Greenland. However,
42
The Intermediary | February 2026
whilst announcements on significant
levels of tariffs on imports in the US
last April triggered sharp market
reactions, the latest developments
have had a much more muted impact.
Despite all the noise, financial
markets have been relatively
steady and changes to interest rate
expectations have been minimal.
Recent moves in rates seem to be
more closely linked to soer national
employment data in both the US and
the UK rather than fears of escalating
trade tensions. The biggest market
reactions have instead been seen across
commodity markets, with gold prices
MARTIN TEMPLE
is an economist
at Leeds Building Society
Many may be worried
about how geopolitical
uncertainty could affect
interest rates and their
personal finances”
Supporting brokers
Standing firm amid market turbulence
continuing to reach record highs and
oil prices remaining weak.
For now, developments in the news
are not currently feeding through
into borrowing rates in the UK, but
markets will continue to monitor the
situation closely and I am reassured
by the fact that the market has
remained stable.
Having bought my own first home
at a time also dominated by worrying
headlines – albeit related to the fallout
from the dot-com crash – I understand
that it can feel disheartening and
unseling when there is an almost
constant stream of potential worrying
news. But geing on the property
ladder is rarely about perfect timing,
it’s about having the right support.
We offer a range of products designed
to help tackle some of the barriers to
homeownership, such as minimum
income requirements, loan size, and
deposit requirements. These options
allow people to borrow responsibly
while widening their access to the
housing market.
I know from my own experience
of buying my first home that
affordability maers a lot, particularly
in the current economic climate.
That’s why it’s important for people to
understand the basics around interest
rates and how they might be impacted
by what’s going on in the world.
As 2026 progresses, I expect to see
a calmer, more balanced housing
market, assuming no material
external shocks actually materialise.
Property prices are broadly stable,
rather than surging, and buyer
interest remains steady, albeit
sensitive to mortgage affordability.
With this in mind, we’re looking
forward to continuing to work
with our intermediary partners,
and by extension more aspirational
homeowners, throughout 2026 –
whatever it may bring. ●
