The second rise in interest rates in 12 months should not deter home-hunters from buying in Lincolnshire, according to housebuilder Chestnut Homes.

The Bank of England today (August 2) voted to raise interest rates from 0.5% to 0.75% - the highest level in 10 years.

But the Lincolnshire housebuilder claims that this rise will have little effect on home-buyers, claiming incentives like Help to Buy and the abolishment of stamp duty for first-time buyers has ensured that the market is still favourable to purchasers.

David Newton, Managing Director of Chestnut Homes, said: “Despite rising twice over the past 12 months, interest rates are still very low by historic standards, meaning buyers will still have access to very competitive mortgage deals. 

“We’re confident that this latest rise won’t shake any confidence in the housing market.

“Some home owners with a variable-rate mortgage may see a rise in monthly repayments, but with the wide availability of fixed-rate mortgages this relatively small increase shouldn’t put off home buyers.

“With the combination of low interest rates and the continuation of the popular Help to Buy scheme, it’s still a very good time for buyers to climb the property ladder.

“Recent research from Santander suggests it is now cheaper to own a home in Lincolnshire, so the rise in interest rates will help savers grow their money more quickly and escape the rental trap.” 

The government-backed Help to buy scheme allows buyers to secure a new home with a 5% deposit and a 75% mortgage. The remaining 20% is paid off as an equity loan, which remains interest-free for five years.

Chestnut Homes is currently building the first phase of The Quadrant, a development of 500 new homes, new commercial premises and stadium for Boston United.