However, the poll of intermediaries working in the property and asset finance sector by United Trust Bank (UTB) also revealed that the majority (76%) believed there would be no increase in 2017 while the remaining 3% said they did not know. 

The results followed the news that the Bank’s Monetary Policy Committee had voted by 6-2 in favour of keeping the base rate at 0.25%, where it has been for the last 12 months following the reduction after the EU referendum.

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Brokers were also asked for their views on the outlook for the UK residential property market:

• 26% of respondents indicated that their outlook was positive
• 28% indicated that their outlook was neutral
• 10% indicated that their outlook was negative
• the remainder didn’t express an opinion either way.

“The Bank of England has lowered its growth forecasts to 1.7% for this year and 1.6% for next year and inflation is currently running at 2.6%,” said Harley Kagan, group managing director of UTB (pictured above).

“Interest rate increases, when they come, are likely to be by small increments and over several months, if not years.

“Financial markets suggest a rise in interest rates will come only towards the third quarter of 2018.

“This is unwelcome news for savers, but borrowers – be they business or individuals – will be relieved that the cost of credit is unlikely to increase drastically or suddenly.

“This should encourage SMEs to keep looking out for opportunities to invest and grow their businesses and developers to keep contributing to the many hundreds of thousands of new homes which the UK needs to build.

Harley concluded: “With the uncertainty of Brexit adding to the complexity of challenges faced by the UK economy, Mark Carney [governor of the Bank of England] will be mindful of doing anything which might stall an economy which is still very much finding its feet 10 years on from the start of the credit crisis.”