Bank rate rise predicted in Wales

According to the latest Principality Building Society Saving and Spending Survey, over two-fifths (44%) of people living in Wales thought that interest rates were likely to rise this year, while 38% felt that rates would remain at their historic low of 0.5% into 2011.

The news follows last month's surprise seven to one vote after Monetary Policy Committee member, Andrew Sentence, called for a rise in interest rates for the fist time in over a year.

However, while Mr Sentence voted to lift rates by 0.25%, the Principality results reveal that the people of Wales are split over how far rates will rise this year, with almost a quarter expecting rates to rise by 0.5% and 24% expecting a rise of as much as 1% before the year is out.

And just over a third ( 35%) of borrowers in Wales, have said that they had already begun making plans to cope, should the expected interest rate rise come to fruition.

Commenting on the results, Graeme Yorston, chief operating officer at Principality Building Society, said: "The findings of our survey are mirrored by our own figures which show an increase in people choosing to take out fixed rate mortgage deals, indicating that prudent borrowers are beginning to prepare themselves for the eventualities of a rise.

"While there is growing speculation that the Monetary Policy Committee will be forced to make at least a nominal increase in interest rates in order to control increased inflation over recent months, opinion does remain split, and the confusion only serves to further dent confidence in an ever fragile market."

The Principality survey, carried out by Cardiff-based Research & Marketing and conducted among 600 people living in Cardiff, Swansea, Newport and Wrexham, revealed negative sentiment about whether now is a good time to buy property in the welsh market.

Over two-fifths (44%) of people in Wales think now is a bad time to move, with the majority of people blaming difficulty in getting a mortgage (21%), followed by house prices being too expensive (17%) and the unstable economy (17%).

As a result, over 90% of people in Wales said that they did not intend to move this year.

Graeme continued: "Low confidence in the housing market is a symptom of the wider concern about the state of the economy and indeed the austerity measures introduced through the emergency budget. Buying a home demands consumer confidence as people will want to be sure that the property will at least hold its value, and in today's market, that is a difficult call to make for the would be homeowner.

"There is no doubt that the base rate will rise - the real debate is at what point in time this will happen. In light of the inevitable movement, borrowers are wise to make preparations sooner rather than later in order to safeguard themselves for the future."