The Royal Institute of Chartered Surveyors (RICS) believes that the latest increase in UK interest rates to 5.75% will further dampen housing demand as first time buyers find their borrowing constrained and households who are coming to the end of their fixed rate deals face a big increase in their monthly payments.

David Stubbs, senior economist at RICS, said: “In fact, someone with a £100,000 mortgage who is coming off a two-year fixed rate deal in the next few months will face an increase of around £100 in their monthly repayments.

“Furthermore, this may not be the end of the pain. With economic growth, strong both at home and abroad, a resilient housing market and elevated inflation expectations, it is likely that the Bank of England will choose to push interest rates up again in the coming months.”

Tony McGough, head of forecasting and the economy at Jones Lang LaSalle, said: “The move is expected to continue to cool the real estate market and remove the more speculative and leveraged investors from the market. As this rise was expected, the long term financial markets have already priced this move into their financing rates. Expectations are for another rise before the end of the year, but with a pause for a month or two, as the bank evaluates financial figures following the rises to date.”