Bank of England keeps rates steady

Property owners will be breathing a sigh of relief today as the Bank of England has decided to keep interest rates on hold at 5.25 per cent.

Following a surprise increase last month, which came after two hikes in August and November of 2006, the bank''s monetary policy committee decided to wait before making any further adjustments to the cost of lending.

Homeowners with tracker mortgages have found themselves struggling to meet repayments in recent months, while many of the best fixed rate deals have been disappearing from the market.

First-time buyers have also been hit hard by the rate hikes, with property ownership now even further from their grasp as house prices continue to rise.

David Bexon, managing director of SmartNewHomes.com, said therefore that the decision to keep interest rates at 5.25 per cent is a "sensible" one that will help to restore consumer confidence in the housing market.

"A further rise at this time would have left many vulnerable groups struggling with repayments and could have caused wide spread stagnation across the housing market, with many homeowners either afraid to, or unable to move," he said.

However, some experts believe that this month''s decision is just a temporary reprieve and that a further hike in lending rates is on the horizon.

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