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The Bank of England has just taken the decision to increase interest rates by a further 0.25%, placing the base rate at 4.25%.

Head of Corporate Partnerships at Sirius Property Finance, Kimberley Gates, commented:  “An eleventh consecutive interest rate hike will come as a blow to the nation’s homebuyers who will now see the cost of securing a mortgage climb that little bit higher at a time when they are already struggling with the wider cost of living. 

 

The silver lining is that today’s increase is the lowest since August of last year which suggests we could be over the hump. However, we expect that interest rates will continue to rise before they fall, with the general consensus being that they will peak at five percent.” 

 

CEO of Octane Capital, Jonathan Samuels, commented: “Despite the global banking wobble the message from the Bank of England is clear, they aren’t worried and their sights remain firmly set on bringing down inflation. 

 

This seems like the right call given that UK inflation is persistently higher than other advanced economies in the EU and the US.

 

However, in seeking to reduce inflation through higher rates we can expect downward pressure on house prices to filter through as homeowners see their fixed rates end and they have to take out more expensive mortgages.”

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Managing Director of Apex Bridging, Chris Hodgkinson, commented:

“Interest rates are now at their highest since October 2008 and this will understandably have an impact on the purchasing power of the nation’s homebuyers. We’ve already seen house prices cool since September of last year as a result of higher mortgage costs, with buyers no longer borrowing beyond their means in order to climb the ladder.

 

However, while they are now treading with greater caution, the increased cost of borrowing certainly hasn’t deterred them and, all things considered, the property market remains in very good shape despite the wider economic picture.”

 

Co-founder and CEO of Wayhome, Nigel Purves, commented: “We’ve already seen how increasing interest rates have brought uncertainty to the mortgage sector and it’s the nation’s first-time buyers who have been hit hardest in this respect. 

 

Not only are they facing the tough task of accumulating a deposit on the ever increasing cost of a home, but the number of higher loan to value products has also reduced, while the monthly cost of repaying a mortgage has climbed. 

 

It’s a bleak outlook, to say the least, and one that will be all the bleaker following today’s decision.”

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