There has been a warning that some Irish mortgage holders could see an increase of up to ½% in their interest rates before the end of the year.

Ireland's Professional Insurance Brokers Association hinted that at a rates' hike might be on the way.

Any such rise would be certain to slow recovery in the beleagured construction sector as the availabiulty and affordability of mortages is key to the sector's emergence from recession.

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However, it expects no change in the ECB rate for at least several months.

That is despite the decision on Thursday by the European Central Bank to keep its mortgage rates at an historic low and the news that UK interest rates were this week kept on hold - at a record low of 0.5% - by the Bank of England for the 15th month in a row.

Meanwhile, the property sector and the construction industry have also been absorbing other news that rent supplement levels are being reduced to reflect the fall in rental values.

The Department of Social Protection paid more than €500m in rent supplements last year, funding 95,000 households or 50% of the country's private rented accommodation.

The changes will apply to new claims and when existing arrangements are being renewed.

The Government hopes the move will make savings of €20m for the Exchequer this year.

(BMcC/GK)