First time buyers in Kent will struggle even more to get onto the housing ladder after the Bank of England opted to increase interest rates for the first time in a decade.

Real estate investors warned some housebuilders in the county may hold back on construction amid concerns it will be harder for people to obtain a mortgage.

The addition of the uncertainty over Brexit heightened the potential for a slowdown, it was claimed.

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The Bank of England’s monetary policy committee announced today it has decided to increase the base rate by 0.25% to 0.5%, the first time it has voted for an increase since July 2007.

Interest rates have been at a historic low of 0.25% since August last year.

Higher rates increase the cost of borrowing on things like credit cards and mortgages but are beneficial to savers.

Shahan Lall, chief executive of real estate investor Lall Property Group in Maidstone, said: “This is causing concern in the build-to-sell market.

“It will stretch the affordability of new mortgages being granted for first time buyers.

“I expect to see a lot of nervousness alongside Brexit, so the build-to-sell market may potentially hold back on developing as many units and that will ultimately rein in the supply.

“It’s only a quarter percent rise but the problem is it’s combined with the uncertainty of Brexit.

“It will raise standard variable mortgages and for someone who can barely afford it, that is quite a hit.

“Then there is the worry over whether there will be another quarter percent rise next year and soon after that.”

The Bank of England has upped interest rates as it tries to meet its 2% target for inflation, which stood at 2.8% in September according to the Consumer Prices Index.

Jo James, chief executive of Kent Invicta Chamber of Commerce, said she would have preferred “a further period of monetary stability, with interest rates steady over the near term”.

She fears it indicates a long-term shift upwards.

She said: “Today’s quarter point rise may have little effect on most companies, but many will view this as the first step in a longer policy movement – not as a simple reversal of last year’s cut.”

“Today’s quarter point rise may have little effect on most companies, but many will view this as the first step in a longer policy movement – not as a simple reversal of last year’s cut...” - Jo James, Kent Invicta Chamber of Commerce

The rate rise comes after property chiefs from across the county gathered in Maidstone this morning for the launch of the Kent Property Market Report.

Mark Coxon, director of Gravesend-based Caxtons Chartered Surveyors, the report’s author, shrugged off concerns about an interest rate rise.

He said: “This year there’s been more new build sales than ever before and 90% of new build sales are taken on a fixed rate mortgage.

“The interest rate rise is probably not going to make too much of a difference.

“Interest rates are at a historical low. Going up a quarter percent won’t make too much difference unless you’re on a variable rate.

“Hopefully they won’t be increasing again.”

Tim Maakestad, partner at the Canterbury office of accountancy Kreston Reeves, added: “There will always be winners and losers with an interest rate rise, nothing benefits everyone.

“The winners will be savers, although the rate rise is unlikely to be passed onto them in full or straight away.

“People on fixed rate mortgages will be unaffected until their rate expires.

“The losers will be those people with credit card debt and those on variable and tracker mortgages, seeing the first rise in their monthly payments for over 10 years.

“Business borrowing will also be affected and new business borrowing in particular will now be more expensive.

“In the longer term, the Bank of England will be looking ahead to Brexit in 2019 and be keen to avoid the UK slipping into recession so any further rate rises are likely to be slow and measured.”