Henry Pryor, founder of primemove.com, says: “The move to a 5% base rate will only upset what is already a fragile market.
“Nationally, house prices have been increasing at a healthy rate over the past year, but the overall inflation masks regional differences. London and the South-East have performed well but peripheral regions, including the North, have seen more modest levels of growth.
“The rate rise is bad news for both potential homeowners and those already on the property ladder. Higher costs of borrowing will increase mortgage repayments, making the cost of buying a house a lot more expensive.
“Consumer debt levels are already high and this 0.25% rate rise will do nothing but knock confidence in the market. This could prove seriously detrimental to the levels of supply and demand.”