IT'S bad news for homeowners and those trying to step on to the property ladder, but York estate agents say the interest rate rise will not affect the booming house market.

They were reacting after the Bank of England announced on Thursday it was putting up its base rate for the first time in almost four years.

The 0.25 per cent rise, reported in later editions of yesterday's Evening Press, brings the new base rate to 3.75 per cent. It is the first rise since property prices began spiralling in York in the last two to three years.

The average increase in the rate for new borrowers in York will be £13.51 a month, based on figures from the Halifax which show that between July and September the average price of a home in the city was £171,071, with average advances on new home purchases being £98,313.

Louise Smithson, franchise supervisor at the Citizen's Advice Bureau in York, said: "There are a lot of people who are going to have a very bad Christmas."

But estate agent Barry Crux, principal of Barry Crux and Company in Castlegate, York, did not think the rise would have much effect on his business. He said he was "not really worried" by the news.

He said: "It has been on the cards for a little while. I don't think it will have any impact at all, personally.

"If a quarter of a per cent has so much impact on people that they put off buying or selling, then they shouldn't be doing it in the first place. In terms of the bigger picture it is not really relevant.

"I think it's likely that rates will go up again, but I can't see them going up by more than one per cent.

"We are not going to get the hikes we have had in the past."

Peter Docwra, co-owner of Ashtons estate agents, based in Selby and York, agreed.

He said: "I'm not worried at all. It's a small rate increase and most people are on fixed rate mortgages anyway.

"It is not going to affect the man in the street that much.

"Historically, house prices double every ten years, so what happens in the short term is not as relevant to the long-term investor."

Gerry Gray, of Grosvenor International, one of York's most senior independent financial advisers, thought the Bank of England's rate increase decision would be reversed in time.

He said: "They are naturally worried about consumer debt and fear the effect on the economy should the house bubble burst. This increase in rates is a case of a stitch in time, but it is bound to go down again."

Updated: 10:46 Friday, November 07, 2003