Here we go: rate rise likely this year

Agents and vendors beware - an interest rate rise may be coming this year.

This follows the revelation that two members of the Bank of England's Monetary Policy Committee voted to raise interest rates earlier this month - the first time in three years that policymakers have done so.

Ian McCafferty and Martin Weale, the two MPC members in question, did not succeed in securing a majority when the vote took place on August 7 but this was the first time that the committee was split since July 2011.

Interest rates have been unchanged since March 2009 but minutes of this month's MPC meeting suggest that both Weale and McCafferty felt rapidly falling unemployment made it more likely that salaries would pick up in the coming months - and a rate rise could stem inflationary pressure as a result.

The pair claimed that strong economic growth figures had been underpinned by what they called "stimulatory monetary policy" and that a rise of 0.25 per cent in the base rate would be helpful in curbing inflation.

Earlier this week - in response to unexpectedly strong figures on house price growth from the ONS, reflecting the transactions picture in June - some agents have urged the government and the Bank of England not to over-react and risk killing housing recovery.

David Newnes of LSL Property Services says further interventions or borrowing caps could pull the rug out from under the market and points out that the latest Office for National Statistics data actually shows seven regions in England and Wales with falling house prices in June.

Peter Williams, executive director of the Intermediary Mortgage Lenders Association, says the split vote means a rate rise is firmly on the cards. He says that even before the minutes were released, one in three brokers expected a rate rise this year - higher than at any other time in 2014.