The Bank of England is being urged by property professionals to avoid further interest rate hikes this week.
The Bank’s Monetary Policy Committee is widely expected to hike interest rates for the sixth consecutive month this week from the current 1.75%.
It comes as inflation dipped to 9.9% earlier this month, while Prime Minister Liz Truss unveiled a new two-year energy price cap worth £2,500 for a typical household.
Jonathan Rolande, spokesman for the National Association of Property Buyers, said another rate rise could hit those who are already cutting back.
He said: “Consumers have already begun to cut back on spending.
“This is exactly what the Bank of England wanted to see and we should now see inflation drop over the coming months.
“I hope that in light of increased energy costs and indeed everything else as we approach winter, interest rates are not increased. The mortgage market is split into three, with a third having no mortgage, a third on fixed rates and a third on variable rates.
“Another increase in rates will only affect this smaller section of the market who are more than likely already cutting back on whatever they can.
“The very crisis caused by inflation may be key to the economy stabilising as all unnecessary spending stops. More interest rate rises may push those ‘just about managing’ over the edge.”
Instead, Rolande said, more support is needed for the “lopsided” housing market.
The NAPB is calling for the government to help prevent a house market crash with measures including stamp duty and planning reform.
He added: “We need to start by reforming stamp duty. A positive step would be to see zero rates for pensioners moving downmarket in terms of bedroom numbers, reduced rates for those involved in buy to let transactions and zero rates for first time buyers in less affluent areas.
“We should also look toward selling disused council land for housing with a proviso it is built within one year. Where land is not bought by developers, councils should be encouraged to arrange build and rent programmes.
“Finally, I’d like to see ministers offer tax relief for landlords who commit to long term rental with sensible, set rent increases. Renting longer term is a greater risk for the owner so reward them for providing more security for tenants.”
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It's interesing how those involved in property and heavily invested in the bubble are begging for mortgage rates to be pinned down by artificially low interest rates and quantative easing at the expense of all other sector of the economy.
Also wholly predictable.
There's an expected 200bps rise by year end. Rates will be 3.75%.
I guess you do not own your own business LOL
What a terrifically insightful and analytically balanced response you have been so kind to share with us.
What a joke, they want to keep the economy dependent on high house prices instead of productive sectors of the economy which actually create real wealth and increase productivity.
I'm surprised the National Association of Property Buyers gave this statement but at least they actually admitted the UK economy is too dependent on ever increasing house prices
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