Young people are being priced out of the housing market because interest rates are too high, a leading property expert has said.

Managing director of Galliford Try Homes, Ian Baker, has said the Bank of England needs to cut interest rates today to encourage first-time buyers to jump onto the property ladder.

He said: "While the cost and availability of borrowing has affected the current market, potential homebuyers should not be deterred by the headlines."

"An interest rate cut of 0.5 per cent now would increase lending funds and if passed on immediately to homebuyers, new borrowers and those remortgaging after an end to low fixed-rate deals would be given a much needed boost in confidence," he added.

The Bank of England will announce its decision on the level of interest rates at 1200 BST today.

Economists overwhelmingly believe the Bank will resist pressure to cut interest rates – keeping them at five per cent – according to Reuters.

The Home Builders Federation warned today that the Bank is underestimating the threat posed by a potential downturn in the property market.