Ref. 30861-7HOMEOWNERS in Swindon have reacted with dismay to the Bank of England's decision to raise interest rates.

The base rate has gone up by 0.25 per cent to 4.5 per cent, the fourth quarter-point rise since November and it is tipped to pass five per cent by the end of the year.

The latest increase could mean average payments for Swindon homeowners going up by nearly £25 a month.

"Unless they have opted for a fixed rate mortgage, they are going to face paying a little bit more," said Chris Scott, the treasurer of the Swindon Chamber of Commerce.

New homeowner Tori Sorrell is among those bracing themselves for higher mortgage payments.

The 23-year-old teacher, who bought a Victorian two-bed in Old Town in November, has watched interest rates creep up steadily, forcing her to shell out £30 a month more than she was seven months ago.

"The new increase will mean paying out even more, and I'm already struggling," said Tori.

"I'm worse off than if I had been renting and it's unfair.

"It's turned out to feel more like a burden than an investment.

"If the payments are going to go even higher I don't know what I'm going to do."

Charlotte Luckett, a 23-year-old surveyor who bought a one-bedroom flat in Old Town five months ago, said: "I have been helped by my family but I feel sorry for people who aren't so lucky.

"The rate increases will be good in the end because house prices will go down.

"But for now the rates are tough for homeowners and particularly for first time buyers."

Lenders are expected to follow the Bank of England's lead and raise their mortgage rates over the following few days.

Rosemary Callender, spokeswoman for Swindon-based building society Nationwide, said: "We haven't announced any changes yet we will be monitoring the reaction of the market and will make a decision that ensures we retain our strong

competitive position in both the mortgage and savings markets.

"We expect rates to rise to five per cent by the end of the year."

The news of the rate rise was announced by the Bank's Monetary Policy Committee, which is charged with reviewing interest rates on a monthly basis.

Analysts said the decision was made in a bid to stem rises in house prices and consumer spending.

The housing market is showing little sign of cooling down and prices in Swindon have risen almost 10 per cent in the last year and nearly 30 per cent over the last two years.

Simon Rubinsohn, of stockbroker Gerrard, predicted rates could rise even further.

"We still believe there is a very real risk of rates being raised to 5.5 per cent over the course of the next 12 months," he said.

Andy Tate