Landlords and property investors expect the interest rate to rise gradually as the UK lifts itself out of recession, according to the Young Group's Young Index.

Neil Young, chief executive officer of the company, said that this sentiment is "as you would perhaps expect when emerging from an economic downturn".

The Bank of England's monetary policy committee brought the cost of borrowing down to a record low of 0.5 per cent in March this year and it has remained at this level for the past seven months.

And Benjamin Williamson, economist at the Centre for Economic and Business Research, said this week that it is unlikely interest rates will change before the end of 2010.

Meanwhile, the latest Young Index has revealed the ambitions of property investors in the coming months, with 53 per cent of them considering purchasing additional residential property in London during the next year.

Some 26 per cent are looking to boost their portfolios with property purchases outside of the capital.

Written by Sarah Field

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