RICS Comment on Interest Rate Decision

6th July 2007

Commenting on today’s interest rate decision, David Stubbs, senior economist at the RICS said:

This latest increase in UK interest rates will further dampen housing demand going forward as first time buyers find their borrowing constrained, and households who are coming to the end of their fixed rate deals face a big increase in their monthly payments. In fact, someone with a £100,000 mortgage who is coming off a 2 year fixed rate deal in the next few months will face an increase of around £100 in their monthly repayments.

"Furthermore, this may not be the end of the pain. With economic growth strong both at home and abroad, a resilient housing market and elevated inflation expectations, it is likely that the Bank of England will choose to push interest rates up again in the coming months."

David Pank, Marketing & Sales Director with Manning Stainton, estate agents with offices in Leeds, Wakefield, Wetherby, Pudsey, Morley, Horsforth and Guiseley commented that the increase in the Bank of England Base Rate will have a dampening effect on demand for property for sale in the Leeds, Wakefield and Wetherby areas. 

He commented that “the previous interest rate rises have already had a dampening effect on the sale of property in the West Yorkshire area with sales currently being dramatically down compared with the earlier part of the year. Headline figures for the nation rate of house price increase are misleading as they are being fuelled by huge price leaps in London caused by the impending Olympic Games in 2012, city bonuses together with a booming housing market in Northern Ireland.  I personally do not think another interest rate rise will be needed in the future.”

For more information, please contact:
Stephen Thornton
Senior Press Officer
RICS Corporate Communications

T: +44 020 7695 1682
M: +44 07969 177150