The Council of Mortgage Lenders has warned that interest rates are likely to rise in the near future due to signs that the economy is starting to weaken, after a year of strong growth.
The Council of Mortgage Lenders expects the rate rise to happen during May, which will coincide with the May inflation report, which the Bank of England will use to fully assess the risks to the economy.
The CML do not seem overly worried about this rise, as they believe that it is a return to normal market conditions rather than the sharp market contraction, which we have seen in the past.
Our view
This is in line with our own thinking of the last 18 months. Expect another 0.25% rise in the next three months if the property market starts to recover.