The Liberal Democrats have warned that the Bank of England base rate rise will hit first-time buyers hard.
Vince Cable, Lib Dem shadow chancellor, says: “People want to know that their homes are secure in uncertain times. Today's interest rate rise is going to cost an average first-time buyer £250 extra a year on their mortgage. If interest rates continue to rise, or house prices start to fall, many could find themselves in difficulty.
“The Bank is caught between dealing with the weaknesses in the economy and curbing the house price boom. Gordon Brown must urgently address the failures that have allowed banks to lend irresponsibly and fuel unsustainable levels of debt.”