NAEA warns of rate rise consequences

Posted: 02 Nov 2006 11:05:21 GMT

With just a week left before the Bank of England meets to set interest rates, the National Association of Estate Agents (NAEA) has warned of the consequences of a further raise

With just a week left before the Bank of England meets to set interest rates, the National Association of Estate Agents (NAEA) has warned of the consequences of a further raise.

Analysts say that an increase in the cost of borrowing is near-inevitable as national house-price growth continues unabated and the economy grows faster than expected.

While parts of the UK have shrugged off the cost of borrowing and continued to invest in property, other areas have experienced near-static growth however, said the NAEA.

"A further rate rise could have a detrimental effect on the areas that are already looking slightly flat," said NAEA chief executive Peter Bolton King.

"The market, it appears, was buoyant enough to absorb the [August] rise without too drastic an effect, and from all reports the market is still in good shape.

"However there has to be doubt as to whether a further rate rise will be absorbed with the same confidence."

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