Jo Carrasco, business partnerships director at Stonebridge:

“This latest increase intensifies the challenge for mortgage advisers to guide new and existing clients through potentially higher borrowing costs, all while the cost of living crisis continues to challenge UK households. 

“However, it’s during these challenging conditions that mortgage advisers can fully demonstrate the value they can add to the financial wellbeing of existing and aspirational homeowners."

Brian Murphy, head of lending at the Mortgage Advice Bureau:

“After a positive inflation reading last month, many would have hoped for a pause in interest rates rising.

“However, it was not to be the case — the BoE has decided that more needs to be done to stamp out the stickiness of inflation in the economy, and in doing so, mortgage holders may need to hold out a bit longer.

“Many will be hoping that we are nearing the peak of interest rate hikes — rates on fixed-term products have been dropping marginally in the past few weeks, and there remains hope that they will continue to do so, despite the decision to increase overall rates for a 14th time in a row."

Paresh Raja, CEO at MFS: 

“The fact that the base rate now resides above 5% is not in itself a significant issue; this was the norm before 2008.

“But the jump up from a meagre 0.1% has come in a relatively short space of time (since December 2021) and has offered borrowers, investors and businesses little time to adapt to higher rates.

“Economists are suggesting the base rate may not rise as high or as quickly as once thought, and the rates available on products are starting to reflect that.

“There is some good news in that the jump was smaller than previously predicted, allowing lenders to reassess their rates accordingly.

“But right now, flexibility and communication from lenders remains of utmost importance, helping both existing and prospective clients to borrow responsibly without pulling products out from under them or being too rigid in the terms of loans.

“The market will realign to a higher base rate in due course, but today’s latest hike reaffirms that lenders must double down on a proactive approach to supporting property owners and buyers who will feel the effects of it.”

Anna Clare Harper, CEO at GreenResi:

‘‘This rise in interest rates means that two million households with mortgages on variable rates, or with their fixed rates coming to an end this year, face even higher monthly mortgage payments. 

“The impact cannot be understated: the cost of housing will be closer to, or even above, net incomes for many householders. 

“We can expect to see many of these property owners selling up for lower prices — investors we work with are currently buying at 20-30% below peak 2022 house prices, though it is worth noting that peak values reflected a mini-bubble from reduced stamp duty combined with very low interest rates through Covid. 

“Despite price reductions, housing is no more affordable today since higher interest rates also affect potential property purchasers.

“This means demand for rental properties is likely to continue to grow, making rents ever higher.”

Jonathan Samuels, CEO at Octane Capital:

“While an unpopular opinion, it could be argued that the BoE hasn’t been daring enough in their decision to increase rates again today, and really another 0.5% increase was needed in order to tame inflation.

“It’s far better to have a short period of pain brought about by higher interest rates, rather than a sustained period of significant economic turmoil and uncertainty.

“Take America for example, where rates started to rise at a similar time to the UK, but in a far more aggressive manner; inflation there is already back to 3% and so the target of 2% is within reach.

“If we had been as bold, then we too would be close to achieving a much heralded soft landing and would be far closer to interest rates falling than we are now."

Jo Breeden, MD at Crystal Specialist Finance:

“The base rate rise was expected from 5% to 5.25% by commentators and the financial markets alike — the BoE had little choice given the current rate of inflation.

“No doubt inflation will fall further when the July data is available, but again it will be way beyond where the BoE want it to be, and so further rises are to be expected.

“In our half year broker survey, 40% thought it would peak above 6%.

“While swap rates have eased somewhat since June’s inflation data, as of yesterday, two years swaps were still above 5.5%, and this time last year they were just under 2.5%. So that’s no great comfort for home buyers or sellers looking for a new fixed-term deal.

“It’s hard to call when the BoE will stop the base rate rise cycle, [but] whatever the outcome the property market will continue to be difficult, [yet] dampening property prices creates opportunities for professional investors.

“If brokers are struggling at the moment in the residential space, they should look to diversify and support property professionals and businesses alike.”

Sarah Thompson, managing director at Mortgage Scout:

“The further increase to the Bank of England base rate is the fourteenth in as many months, and it’s unlikely this will be the end of increases in 2023. 

“Since last month’s reduction in the inflation rate we’ve seen lenders reduce their interest rates by around 0.4%.

“We believe it’s unlikely that mortgage rates will increase immediately as the banks have already factored this into the products that are currently available.

“What I would urge everyone to do is really look at your BTL properties, even if you have a lower fixed mortgage rate [as] the likelihood is that rates will probably be higher when you come to renew.

“Paying extra now — if you can afford to — will help cushion the blow if your mortgage rate increases and has the added benefit of reducing your mortgage term and therefore the interest you pay overall.

“It is crucial to speak to your broker now to understand your options so that you are prepared.”