Further rate rises expected for first time buyers

04-Jun-2007

The vast majority of consumers expect interest rates to surpass current levels in twelve months' time, spelling bad news for first time buyers looking to avoid expensive mortgage repayments, a new study has advised.

The Consumer Barometer from Lloyds TSB Corporate Markets found that more than three quarters of respondents expected rates to rise again over the next twelve months, despite four rises since last August.

Industry analysts expect rates to be help at 5.5 per cent when the Bank of England reveals its monthly decision later this week, though several mortgage lenders have yet to apply May's rise to their own rates.

"Last month's interest rate rise did little to convince consumers that rates had reached a peak. In line with the prevailing opinion of the financial markets, consumers believe rates will increase further this year," said Lloyds TSB Corporate Markets chief economist Trevor Williams.

Last week the Royal Institution of Chartered Surveyors (Rics) advised that six per cent rates were now in sight.

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