Rate rise is ‘premature and disappointing’, say Estate Agents

The widely unexpected rise in interest rates today from 5% to 5.25% has been met with by surprise from the National Association of Estate Agents (NAEA), which believes that not enough time has been given for the effect of the November rate rise to be fully felt.

Peter Bolton King, Chief Executive of the NAEA says: “The full effect of the rate rise in November is yet to be felt in the residential housing market. This shock decision from the Bank of England is clearly premature and extremely disappointing. Whilst the early indications for 2007 are that the housing market is performing well, the vast regional differences remain a concern. The market in London and the South East of England continues to thrive, however segments of the market are much steadier in other areas of the country.

“I strongly urge the MPC to take the regional differences into consideration and not be led by the South East when making future rate decisions as this approach could be extremely damaging to the market in underperforming areas.

“For those who have held mortgages for many years, rates are in fact historically low. However it will undoubtedly be the first time buyer sector of the market that this rise will be most devastating for, as affordability issues are an ever increasing barrier onto the market.”