First time buyers could benefit from end to rate rises

20-Jul-2007

The Bank of England may have raised rates five times in the past 11 months but such increases may have come to an end, it has been suggested, raising hopes that first time buyers will be able to benefit from both slower house price growth and stable monetary conditions.

Despite most price indices reporting that a slowdown in the sector is now taking effect, the spate of recent rate rises and the prospect of more to come has made some prospective homeowners reticent about getting onto the property ladder, but this uncertainty may be set to fade, according to Simon Ward of New Star.

"Recent developments have boosted the chances that rates have peaked at 5.75 per cent," Mr Ward noted.

The suggestion was echoed by Michael Coogan of the Council of Mortgage Lenders, who advised earlier this week that the Bank should now be more cautious about raising rates.

"We believe the Monetary Policy Committee should carefully assess the impact of past rises on inflationary pressures before it takes further action," Mr Coogan commented.

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