Those across the UK who have become accustomed to stable, low interest rates will now need to prepare for the possibility of increased fluctuation, property experts warn.

This month the Bank of England announced interest rates will rise from 0.25 to 0.5%, marking a significant change in direction following almost a decade of record low interest rates. And while this move is not surprising to most, it could come to the detriment to many first time buyers.

"Today's interest rates rise announcement may not seem like a substantial increase, but it is highly likely that this will be followed by further increases over the coming years as the Bank of England puts an end to the almost decade of record low rates,” says Nick Marr, co-founder of property marketplace TheHouseShop.com.

“Many homeowners, especially first time buyers who have purchased properties during this period, will need to re-asses their mortgage repayment budgets and make plans on how they would cut costs should rates rise even further over the coming months and years."

But it is not just homeowners who will be affected by the new increased rates – tenants will also feel the burn.

“The boom in the ‘Buy To Let’ market over the past five to ten years has meant that a large number of tenants in the private rental sector could also be affected by the rates rise,” Nick says. “’Buy To Let’ landlords plan their budgets and set rents according, in large part, to their mortgage repayments, and the new higher interest rates will be yet another blow for landlords' profits and tenants' affordability.

“Many UK landlords are already planning to raise rents following the Section 24 tax changes and proposed ban on letting fees to tenants, and this new announcement could push even more landlords to consider rent rises."

And with landlords forced to increase their prices, tenants in bigger cities like London, in which many tenants are already dangerously close to affordability limits, this could have a significant and damaging effect on the sector.

"Our recent YouGov research showed that many tenants are already dangerously close to affordability limits, with 1 in 4 private renters spending more than half their monthly income on housing costs,” Nick says.

“Should we see a more significant rates rise in the next few years, we could see a substantial increase in the number of tenants struggling to keep up with rent payments."

But some others within the industry are less fearful and say these changes are expected to be much further down the line. Some also claim the current changes will have little to no impact on buyers in the UK.

Founder and CEO of eMoov.co.uk, Russell Quirk, says: “Where the UK property market is concerned, there is certainly no cause for panic as we are unlikely to see any further adjustments too soon down the line and it is very unlikely that we will return to the extraordinary highs of the late 80s, when many fell into a financial black hole.

“For UK Property PLC, today's announcement should be met with a distinctly apathetic approach. There's nothing to see here."

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