Homeowners have been warned that last week’s quarter-point rise in interest rates could signal the beginning of the end for the mini-boom that has gripped the housing market this year.

Estate agents are even warning of stagnation outside London, and possibly price falls if rates head to 5.5 per cent or even 6 per cent, as some analysts are predicting.

The Bank of England’s monetary policy committee (MPC) lifted Bank rate by 0.25 percentage points to 5 per cent on Thursday, its highest level for five years.

The rise will cost homeowners with variable-rate mortgages a total of £95.5m a month in extra interest just as Christmas approaches, according to L&C Mortgages, a broker. Someone with a £150,000 interest-only loan will see their monthly payments go up by £31.25 — probably on December 1.

The increase followed August’s quarter-point hike, so thousands of homeowners are already feeling the pinch and things could get worse.

Dominic White at ABN Amro, an investment bank, said: “The MPC’s statement last week suggested it is happy to continue raising interest rates gradually. We believe there will be another 0.25-point increase in February, then a further one in May, which would take Bank rate to 5.5 per cent.”

Chris Burvill at Gartmore, a fund manager, thinks rates could even hit 6 per cent. He said: “We may see anything up to a one-point increase in interest rates over the next year before the MPC feels confident that inflation is back under control.”

If he is right, someone with a £150,000 interest-only mortgage will have seen their payments go up by £187.50 a month since the Bank started raising rates in the summer.

The consensus among economists, though, is that rates will only go up by another quarter point in February, adding another £30 a month to mortgage bills.

Analysts believe this will spell the end of the housing-market revival that has surprised the experts this year.

Halifax said last week that prices rose by a healthy 1.7 per cent in October, taking the annual rate of growth to 8.6 per cent, compared with 5.1 per cent at the start of the year.

However, Martin Ellis, Halifax’s chief economist, thinks growth will head back to 5 per cent by the end of the year, even without another rate rise. He said there are already signs of a slowdown. “There have been indications of a weakening in activity at the earlier stages of the house-buying process, suggesting that growth may soon begin to slow. Higher utility bills and the increase in mortgage rates are expected to constrain housing demand.”

Some estate agents fear that last week’s rise will result in stagnation, rather than a slowdown, in some parts of the country.

While the housing market in London and the southeast has seen particularly strong growth this year, prices in other regions have barely moved. Homeowners in Wales have seen price increases of just 0.4 per cent this year, while in the East Midlands the average home is worth only 0.5 per cent more than it was at the beginning of the year, according to figures from Hometrack, a property consultancy. By contrast, Londoners have seen their homes surge in value by nearly 10 per cent.

Peter Bolton King at the National Association of Estate Agents said: “London and the southeast has been going mad but that’s distorted the overall picture. In other areas, growth is very patchy. We believe there were enough clear signs that the housing market is slowing for the MPC to have left rates alone. Most households will be able to cope with rates at 5%, but I would be concerned if they went up further.”

Milan Khatri at the Royal Institution of Chartered Surveyors also thinks house-price growth could be flat in parts of the country. “There has been a great disparity in the level of house-price growth in different areas and if things slow down generally, as I expect they will, the places that have seen the least growth could drop close to zero. If rates reach 5.5 per cent, the chance of price falls will heighten,” he said.

Lenders have been accused of raising the risk of a bust by encouraging housebuyers to take on big debts. There are also concerns about landlords who have jumped on the buy-to-let bandwagon recently. Many have been funding some of their mortgage costs out of their own pockets because their rental income is not covering their loans.

Most analysts think the market will avoid a downturn. Richard Donnell at Hometrack said: “We probably will see prices soften and it will become more of a buyers’ market again. However, reasonably priced properties will continue to sell.”

David Gough and Amelie Sandow chose to fix their mortgage recently to protect themselves from the risk of rate rises. They have just bought their first home in Holloway, north London, and opted for a two-year fixed-rate mortgage. They also put down a 10 per cent deposit to help bring their mortgage payments down.

Gough, a landscape architect, said: “We wanted to know exactly what our payments would be each month and didn’t want to have to worry about interest rates.”

For more on the housing market visit www.timesonline.co.uk/mortgage