UK mortgage market update: rates rise again as oil surges to $108
The rate-cutting run of August has gone into reverse. Barclays, Santander, HSBC and NatWest all raised rates from the start of September, and by midweek Nationwide, TSB, Accord and Principality had followed. Nationwide’s cheapest two-year fix, one of the market’s standout best-buy rates, rose from 4.48% to 4.63%. The cause is oil, not the Bank of England: Brent crude surged past $100 and hit $108 a barrel on Thursday, its highest since May, as fighting between the US and Iran intensified sharply.
Here’s what happened, why it matters, and what to do if your deal is coming up for renewal.
Last updated: Friday 11 September 2026.
This week at a glance
| A genuine, multi-lender reversal. Barclays, Santander, HSBC and NatWest raised rates from the start of September, followed midweek by Nationwide, TSB, Accord and Principality | |
| Nationwide's standout best-buy rate is gone. Its cheapest two-year fix rose from 4.48% to 4.63% on 9 September | |
| The cause is oil, not the Bank of England. Brent crude hit $108 a barrel on Thursday, its highest since May, as the conflict between the US and Iran escalated sharply | |
| Two-year swap rates rose to 4.26%, up from 4.06% a month earlier, the actual mechanism behind this week's repricing | |
| House price indices told two different stories. Lloyds reported the first annual price fall since November 2023, while Nationwide's own index showed prices rising, a reminder that the two track different lenders' books | |
| Not every lender moved the same way. Darlington Building Society cut selected rates by up to 40 basis points on Friday, even as Principality confirmed further rises from 14 September |
Why rates reversed: it’s oil, not the Bank of England
This is the story of the week, and it’s a mirror image of what we covered a fortnight ago, when falling oil prices gave lenders room to cut. This week, the opposite happened, and sharply.
Brent crude rose past $100 and settled near $108 a barrel on Thursday 10 September, its highest level since 19 May. The escalation behind it is serious: the US has reportedly targeted Iranian oil tankers, Iran has launched missiles at US warships and tankers in the Persian Gulf, and Iran’s Houthi allies struck several energy facilities in Saudi Arabia this week. Saudi crude output fell by around 1.9 million barrels a day in August, and top US officials have reportedly told the President the conflict could continue for years.
Fixed mortgage rates are priced off swap rates, not the base rate, and this is where the transmission actually happened. The two-year swap rose to 4.26% by 3 September, up from 4.06% a month earlier. Moneyfacts was explicit that this week’s lender repricing tracked the swap rate move directly, not any change from the Bank of England, whose base rate has sat unchanged at 3.75% since 30 July.
Which lenders moved, and when
Lenders raising rates this week
Not every lender moved in the same direction, though. Darlington Building Society cut selected rates across residential and buy-to-let ranges by up to 40 basis points on Friday, even as Principality confirmed a new product transfer range from 14 September with further increases of its own. It’s a genuine reminder that this remains a lender-by-lender market, not a single uniform trend.
Why two house price indices told different stories
If you’ve seen conflicting headlines about house prices this month, here’s why.
Two house price indices, two different stories
Lloyds (formerly Halifax)
-0.4%
Annual change to August, first fall since November 2023
Average price: £298,468
Nationwide
+1.6%
Annual change, published 1 September
Average price: £275,465
Each index tracks a different panel of mortgage lenders, not the whole market, which is why the two figures can genuinely move in opposite directions in the same month.
Both figures are accurate. They simply track different panels of mortgage lenders, not the whole market, which is why they can move in opposite directions in the same month. Lloyds’ Amanda Bryden noted that prices have stayed relatively stable for almost two years, moving within a narrow range despite this year’s uncertainty, a useful reminder that neither index alone tells the full story.
The wider housing market: activity improving, prices still soft
RICS’s August survey, published 10 September, showed a market gradually finding its footing.
RICS housing market pulse, August 2026
New buyer enquiries
-19%
Least negative since January, 5th month of improvement
Agreed sales
-17%
Least negative since February, against a -38% April low
House price balance
-28%
Prices still drifting down, even as activity improves
Near-term sales expectations
-3%
Improved sharply from -13% in July
Source: RICS UK Residential Market Survey, published 10 September 2026, covering August 2026. Figures are net balances of surveyor responses, not percentages of the market.
Separately, Rightmove reported buyer demand rose 5% in the first week of September, well above the average 0.4% increase typically seen at this time of year. Every region improved, led by London, up 9%, and the South West, up 8%. The UK economy also grew 0.4% in July, following 0.3% growth in June, a modestly encouraging backdrop even as mortgage pricing moved the other way.
A market that’s resilient, but increasingly stretched
New Bank of England data, published 8 September, gives a useful structural picture of where lending actually stands.
Mortgage lending structure, Q2 2026
New lending above 90% LTV
8.4%
Highest share since the 2008 financial crisis
Lending priced 2-3pts above base rate
3.1%
Highest share since Q1 2023
New arrears cases
9.1%
Down 0.2pts on the quarter
Total possession stock
-4.5%
Largest quarterly fall since Q1 2021
Source: Bank of England Mortgage Lenders and Administrators Return, published 8 September 2026, covering Q2 2026.
Phoebus Software’s Richard Pike summed up the picture as a market that’s struggled to find a clear direction all year, which feels like a fair description of a week where rates rose sharply on geopolitics rather than anything happening in the UK economy itself.
Separately, the FCA confirmed that nearly one million borrowers used its mortgage charter measures to lock in a new deal up to six months ahead of maturity in the first half of 2026, exactly the kind of early planning this week’s reversal rewards.
One industry voice worth noting
Housebuilder Berkeley Group used its trading update this week to call for urgent stamp duty reform, suggesting a 1% cap on new-build purchases as necessary to reach the government’s target of 300,000 new homes a year. Worth being clear this is a housebuilder’s lobbying position, not a government policy announcement, though it’s a sign of where industry pressure is building ahead of the Autumn Budget.
What to watch next week
What to watch next week
| Tuesday 16 September, August's inflation figure, the last major data point before the base rate decision | |
| Thursday 17 September, the next Bank of England base rate decision, the first genuine test of whether this week's rate rises continue or stall | |
| Ongoing, oil prices and the US-Iran conflict, still the clearest driver of where fixed rates go next | |
| Ongoing, watch for further lender moves. With the market changing this quickly, a rate confirmed early in the week may not still be available by the end of it |
What this means for you
If you’re within six months of a remortgage or purchase completion, this week strengthens the case for reserving a rate now rather than waiting, more than at any point since early August. Most lenders let you secure a rate ahead of time and switch to something cheaper if pricing improves before you complete, which means there’s very little downside to acting sooner rather than later.
If you were quoted or planning to apply for Nationwide’s 4.48% two-year fix, that rate is no longer available. It’s worth getting in touch to see what’s replaced it and whether another lender now offers better value for your situation.
If you have buy-to-let properties, don’t assume every lender moved the same way this week. Accord raised its BTL rates while Darlington cut some of its own on similar products, so it’s worth checking the whole market rather than assuming a single direction of travel.
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Frequently Asked Questions this Week
Why did mortgage rates rise this week?
Brent crude oil hit $108 a barrel on 10 September, its highest since May, as conflict between the US and Iran escalated sharply. This pushed swap rates, which fixed mortgage rates are priced against, up to 4.26% from 4.06% a month earlier. Major lenders including Barclays, Santander, HSBC, NatWest and Nationwide raised rates in response.
Is the Bank of England raising interest rates?
Not yet. The base rate has been unchanged at 3.75% since it was held on 30 July, and no decision fell within this window. The next decision is 17 September 2026, alongside August’s inflation figure on 16 September.
Why do Lloyds and Nationwide show different house price figures?
Lloyds (formerly Halifax) and Nationwide each publish their own house price index based on mortgages approved through their own lending, not the whole market. This month Lloyds reported the first annual price fall since November 2023, while Nationwide’s separate index showed prices rising, a genuine reflection of different lender panels rather than a contradiction.
Is Nationwide's 4.48% mortgage rate still available?
No. Nationwide raised its cheapest two-year fixed rate from 4.48% to 4.63% on 9 September 2026, following a broader wave of rate increases across the market that week.
Should I lock in a mortgage rate now given rates are rising?
If your current deal ends within six months, yes, this is generally the sensible approach. Most lenders allow you to reserve a rate in advance and switch to a cheaper one if pricing improves before completion, which limits your downside either way.
Your home may be repossessed if you do not keep up repayments on your mortgage.
This article is for information only and does not constitute financial advice. Rates quoted are accurate as at the dates stated and are subject to change or withdrawal without notice. Sources: Bank of England, Office for National Statistics, Financial Conduct Authority, Moneyfacts, RICS, Rightmove, Lloyds Banking Group, and UK mortgage trade press published 7 to 11 September 2026.