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They have warned that the current Bank of England (BoE) base rate of 1 per cent - its lowest level on record - is too low and could spell disaster for the future.

This is despite the Monetary Policy Committee (MPC) having used rapid rate reductions over the last year to alleviate the effects rising inflation and job losses were having on household budgets.

According to Kelvin Lillywhite, an IFA with Albany Financial Consultants, many of clients are now staying on Standard Variable Rates (SVRs) because they are unable to secure an alternative.

"We’re seeing a lot of clients staying on SVRs as they’re unable to get good new deals due to high loan to values. These SVRs are currently attractive, but what happens when we start to pull out of the recession and interest rates are increased?

"These clients will still have massive LTVs and that could mean, as we start to get out of this [recession], another problem is thrust upon us with lots of repossessions as those on SVRs see their monthly repayments creep up and up."

Lillywhite's concerns are mirrored by Chris Hulme, director of the Clayton Hulme Partnership, who said the onward market was concerning him "greatly".

Hulme added that the Bank of England (BoE) would need to take a proactive approach to managing the issues borrowers are sure to face in the recovery period.

"Many borrowers will have great difficulty in remortgaging again over the next three years. SVR historically sits for most lenders at around 2 per cent over base rate, whereas clients are signing up to trackers at BoE plus 3 per cent and upwards.

"These clients will be even more affected by rate increases, further damaging the housing market and adding to the post crash wave of repossessions."

Hulme added that mortgage products that currently offer 3.93 per cent above the base rate - giving a pay rate of 4.93 per cent - are great for now.

But he warned that when the BoE base rate increased, for example to 3.5 per cent, this would bring the pay rate up to 7.43 per cent, a level higher that many SVR's when the base rate sat at 5.5 per cent last year.

"Take the base rate to 4 per cent and you're heading for 8 per cent territory - last seen in the mid-1990s. That really worries me," Hulme added.