The property market needs ultra-low interest rates to continue if property is to remain affordable, a broker has warned.
There are signs that rates are rising, and any increase could halt the recovery by pricing new buyers out of the market, according to Mark Harris, chief executive of mortgage broker SPF Private Clients.
Swap rates are 25% higher than in July, and the underlying trend is upwards, he warned. This means that fixed-rate mortgages are likely to have bottomed out, and could start increasing.
"Affordability is not an issue for buyers - yet - but if demand continues to soar and supply can't keep up, it could easily become one.
"This would affect first-time buyers in particular, who are so crucial to the health of the housing market. We are just seeing their numbers start to recover over the past few months, it would be a real shame if they were priced out of the housing market all over again.
"It really is vital for the market that ultra-low interest rates continue to prevail. Swap rates fell again this week but they are still 25% higher than July and the general trend is upwards, suggesting that fixed-rate mortgages are more likely to rise rather than fall.
"Having said that, while some lenders have raised their longer-term fixes we still have some of the cheapest rates ever seen so if you take one out now, it would be hard to get a bad deal."
Alex Gosling, director of the low cost online estate agent Housesimple.co.uk, has also questioned how long property will remain affordable. "People feel more confident and, with mortgages priced cheaply and now available at higher LTVs, many have decided to go for it. But how long, given the current house price trajectory, before the average household can no longer afford to buy?"