Ordinary homeowners 'will suffer from increased interest rates'

Ordinary homeowners will be among those adversely affected if interest rates are to rise in the near future, according to one specialist.

Chris Jenkins, co-owner of the Homeowners Advice Centre, claims that an increase in the base rate would mean many mortgages on landlord-owned properties would no longer be covered by tenants' rent.

Similarly, he argues that the financial health of householders will be damaged, as individuals may not be able to fulfil repayments on their house-purchase loans.

A recent report from Spareroom.co.uk shows that 41% of individuals who let residential property say rental incomes "barely cover" mortgage costs, while one in ten people would face a shortfall if the base rate were to be increased by just 0.5%.

In June, for the first time since the interest rate was set at 0.5% in March 2009, one member of the Monetary Policy Committee voted to raise it, saying the change would help keep inflation under control.