Anyone who’s ever taken a long-haul flight knows the feeling: the seatbelt sign comes on, the plane starts to shake and suddenly the whole cabin is on edge.
In reality, it’s usually just turbulence. Uncomfortable, but expected from time to time.
It’s not a bad way to describe the current market.
Swap rates are moving in response to global uncertainty, particularly the ongoing tension in the Middle East. Pricing is shifting, sentiment is cautious and once again the narrative is that everything feels a bit… unstable.
A well-structured deal can take a degree of movement
But focusing purely on that is to miss what’s happening on the ground.
Existing weaknesses
Deals aren’t suddenly falling over just because swap rates have moved.
More often than not, what we’re seeing is existing weaknesses being exposed. Transactions that were already tight are now under pressure — the kind of pressure that only really shows itself when conditions get a bit bumpy.
A well-structured deal should be able to take a degree of movement. If a small change in pricing is enough to derail it, the issue is less about the rate itself and more about the lack of resilience built into the original structure.
We have seen this pattern before. If you had believed every ‘Property market crash’ headline over the past decade, you’d have likely stayed on the sidelines — and missed the opportunities that followed.
It’s easy to blame the wider market. Rates, inflation and geopolitical events all play a role but they rarely tell the full story
Markets move, sentiment shifts but activity doesn’t simply stop.
And that’s exactly what we’re seeing now.
Lenders haven’t disappeared. They are still active but are being more measured in how they approach new deals. In uncertain conditions, they’re effectively flying more cautiously — paying closer attention to the controls, the route ahead and how the journey ends.
There’s more scrutiny on income, asset quality, lease length and, most importantly, exit. In the commercial sector, where values are more sensitive to income and tenant performance, those questions carry even more weight.
Real terms
We’re already seeing the impact play out in real terms, as rates rise, affordability tightens, debt-to-income ratios stretch and borrowers can’t raise what they originally expected.
That has a knock-on effect on everything from acquisition to how much can be invested back into the asset.
The emphasis needs to shift away from trying to predict short-term movements in swap rates, and towards building deals that are robust enough to withstand them
At the same time, uncertainty is feeding into valuations. Surveyors are taking a more cautious view and we are seeing an increase in down-valuations as a result.
It’s not just about where rates are today but whether the borrower has a clear and realistic path forward. Can the asset be refinanced under current conditions? Does the deal still hold up if timelines shift or costs increase?
Those are the questions lenders are asking. And rightly so.
Change of emphasis
For borrowers and intermediaries, this means the emphasis needs to shift away from trying to predict short-term movements in swap rates, and towards building deals that are robust enough to withstand them.
Lenders haven’t disappeared. They are still active but are being more measured in how they approach new deals
Trying to predict every movement is a bit like attempting to avoid turbulence entirely. It’s unrealistic, and ultimately not what keeps the journey on track.
That starts with realistic assumptions on value and income, careful lender selection, and ensuring there is sufficient margin within the deal. It’s the financial equivalent of putting on your own oxygen mask first — getting the fundamentals right before trying to navigate everything else.
It’s easy to blame the wider market when things feel uncertain. Rates, inflation and geopolitical events all play a role but they rarely tell the full story.
Yes, the ride is a little bumpier right now, and pricing is less forgiving than it has been in recent years. But that doesn’t mean the market is grinding to a halt.
Deals aren’t suddenly falling over just because swap rates have moved. More often than not, what we’re seeing is existing weaknesses being exposed
Well-structured deals are still progressing, lenders are still lending and experienced investors are continuing to find opportunities.
Because turbulence doesn’t stop the journey; it just tests how well prepared you were for it.
And, in this market, the difference becomes clear very quickly: between deals that were built to handle a choppy flight and those that were always just one bump away from falling apart.
Peter Williams is chief executive of Propp
This article featured in the May 2026 edition of Mortgage Strategy.
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