Interest rate rise hitting homeowner applicants

Nearly half a million people have been turned down when applying for a mortgage - largely due to increasing rates of interest, a consumer site has claimed.

Lending capital has been refused to 460,000 people over the last six months, when the Bank has seen fit to up the level of the base rate by three-quarters of a point, according to Moneyexpert.

This means that since the hikes began in August 2006, 77,000 people have been turned down each month, it added.

And with some experts predicting a further rate rise, first-time buyers may have to work harder to get on the property ladder's first step, according to the company's chief executive, Sean Gardner.

"Anyone taking their first step on to the property ladder needs to take advice and research the market before making an application," he said.

In January, the interest rate went up to 5.25 - the highest level the UK has seen since July 2001.

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