The Council of Mortgage Lenders is unsurprised by yesterday's decision by the Bank of England's Monetary Policy Committee to raise interest rates.
CML director-general Michael Coogan says: “This rate rise reverses the rate cut in July, which was made on the basis of GDP estimates which have since been revised upwards. But it is far from clear whether today's move is the start of a concerted hike in rates over the coming months.
“Much will depend upon how higher rates feed through into household borrowing and spending decisions. Given the uncertainty, mortgage borrowers should take a cautious approach and ensure they have enough flexibility to cope with further rate rises if they occur.
“The CML and other commentators have been expecting the housing market to show signs of cooling for some time, but house price growth has continued to remain strong. Modest increases in mortgage costs are a necessary part of the market's adjustment to more sustainable conditions.”