Prospective home buyers face uncertainty over markets

Surging mortgage rates are expected to push house prices down

Prospective homebuyers in the West have said they feel "like the rug has been pulled from under them" amid continuing market turmoil.

Barney Bryant, who had sold up and was moving in with his partner said he now didn't know what he could afford.

"This news came out and we now don't know what we will be able to afford," he told the BBC.

It comes as new data released today reveals a drop in both sales and new enquiries from house buyers.

The survey, by the Royal Institute of Chartered Surveyors, said that enquiries had fallen for a fifth successive month, driven by fluctuating markets.

Barney Bryant said he was no longer sure what sort of property he could afford

Mr Bryant, from Portishead, North Somerset, said he was now considering moving back with his parents after selling his one-bedroom flat.

"I'm 37, I shouldn't be contemplating that," he said.

'£5-600 a month extra'

Mortgage advisors have also expressed concerns for homeowners on fixed-rate mortgages.

Neil Butler, a mortgage advisor with Ocean Mortgages said he hadn't seen anything like the current situation in years.

"I've only seen this once back in the 1990s," he said.

"People are in for a shock, a lot of people are coming off 1.5% rates on fixed mortgages and they will be facing rates of five or six per cent.

"We're not talking a couple of hundred pounds per month, we're talking five to six hundred pounds a month," he added.

Although the Bank of England only put up interest rates by 0.5% last month, financial experts say the price of government borrowing is causing rates to rise.

"The cost of government borrowing is used to set mortgage rates used by lenders, and money markets are already pricing in that the Bank of England will raise rates steeply in the months to come.

"That's why rates are going up and the next decision isn't due until November," said Susannah Streeter from Bristol-based Hargreaves Lansdown.