But with mortgage approvals slumping in January as buyer demand eased in the face of higher borrowing costs, Ms Haine said falling real wages and persistently high inflation means the property market “needs all the support it can get” to avoid a “dramatic” downturn.
Craig Fish, managing director at London-based mortgage broker Lodestone said: “The Monetary Policy Committee now faces a very difficult decision. There was a wide expectation that rates may well have been kept on hold this week, but I now fear that this may not be the case and we will see a 0.25 percent increase.
“I do hope, however, that they consider the fact that this slight jump has mainly been caused by food supply costs and that a further increase in Base Rate will hurt the economy as a whole. I do not see this having an immediate impact on borrowers, however, as we are seeing lenders’ rates fall in general.
“The only people who will be affected directly will be those on a tracker mortgage if the base rate is increased.”
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