Housebuilders have welcomed the Bank of England’s decision to hold interest rates at 5.25%, despite the likelihood of a further rise next month.
The decision to hold rates follows three rises in the past nine months, including surprise increases in August and January. Although economists had broadly expected the decision, share trading slowed before the announcement amid fears of a further increase.
Imtiaz Farookhi, chief executive of the NHBC, said: “The decision comes at a time when there are ever-increasing financial pressures on homebuyers. Any positive move which maintains affordability for buyers in an inflationary market must be welcomed.”
However, the continuing strength of the housing market and consumer price inflation has led economists to predict a further increase next month, up to 5.5%.
Industry experts have warned that such a rate rise could be detrimental as it would add to the turmoil surrounding the mandatory introduction of home information packs in June.
Bryant-Pearson, chief executive of chartered surveyors Allied Surveyors, said: “Evidence from estate agents is that they’re taking on more instructions, almost certainly because of the fear of HIPs being mandatory from June. A rate rise would add to the confusion, which will be detrimental to the housing market.”