Smith said: "In its May Quarterly Inflation Report, the MPC clearly stated that, although it was appropriate to leave interest rates at 4 per cent, it was standing ‘ready to act to contain any developing inflationary pressures further ahead’. This is against a background of possible inflation caused by increased public spending and higher national insurance contributions from next year.
"Although any rises in base rate are likely to be modest at the outset, they could cause a flood of enquiries into mortgage advisers, as purchasers and those wishing to remortgage rush to pin down a fixed or capped rate as a hedge against future rises. Even if the rate rises do not actually happen until the autumn, increased speculation in the press will have the same effect of boosting interest in mortgage options."
Smith urged borrowers not to forget niche markets, such as self-certification. "Our own research shows that there is a very low level of awareness of the self cert option within the main target group, the self employed and small business owners. As borrowers show renewed interest in securing a new mortgage deal, there may be many applicants coming into the market whose earning patterns have changed since they last took out a mortgage, and who will find themselves unable to get a mortgage deal from a mainstream lender. These borrowers would benefit from the self certification facility."
