Mortgage brokers, lenders and other property market professionals have welcomed today’s cut to the Bank of England base rate.

The rate has dropped to 5% after a year at a 16-year high of 5.25%.

Bluestone head of sales and distribution Mark Hollands says: “Would-be and current borrowers across the country will no doubt be letting out a huge sigh of relief following today’s much-anticipated decision, as rates fall from their historic 16-year high.

“This move should boost consumer confidence and help stimulate activity in the mortgage market.”

Building Societies Association head of mortgage and housing policy Paul Broadhead says today’s rate decision “marks a turning point in what has been a very difficult two and half years” and agreed it would be a confidence boost, stimulating the housing market.

‘Affordability boosted but pressure remains’

SPF Private Clients chief executive Mark Harris says: “Finally, the Bank of England has made its much-anticipated move and cut interest rates from a 16-year high.

“This will give borrowers an affordability boost, ease pressure on household finances and in doing so, assist the wider economy.

“Even if the new Labour Government manages to magic up an additional 300,000 homes this year, there is still a serious affordability issue for first-time buyers.

“Any base rate reductions will be passed on via lower standard variable rates and to some extent headline rates, which will have a positive impact on borrowing boundaries.”

‘Rate cut already priced in to some extent’

Harris adds: “This rate cut has already been factored into mortgage rates with numerous lenders reducing their fixed rates in recent days on the back of declining Swap rates, with a sub-4 per cent five-year fix now available for new purchases.

“The next question is when the Bank will reduce rates again, and whether we will see another cut in September or November.”

North London estate agent and former Royal Institution of Chartered Surveyors residential chairman Jeremy Leaf says: “In our view, when the interest rate decision has been so close to call it means the impact on the market will be relatively minimal one way or the other.

“Of course, some buyers have been holding off in anticipation of a cut for some time but mortgage rates’ have been softening over recent weeks anyway.

“This reduction in rates to 5 per cent will certainly act as a shot in the arm for activity and buyer affordability over the short term at least, complemented by a strong employment picture.”

‘Knock-on impact on house prices’

Richmond estate agency Antony Roberts head of sales Amy Reynolds says: “In our offices, we have been hearing increased talk about the prospect of interest rates falling, with vendors hoping and buyers wishing that this will happen imminently.

“However, buyers need to be careful what they wish for as cheaper mortgages will almost certainly mean higher asking prices.

“If we see a flurry of new applicants coming back to the market, encouraged by cheaper mortgage rates, then these higher prices are likely to be achieved.”

‘Falling mortgage rates to continue, but long-term average will settle higher’

Rightmove mortgage expert Matt Smith says: “While those looking to take out a mortgage soon shouldn’t expect to see drastically lower mortgage rates, we would expect the downward trend we’ve started to see to continue.

“This sets us up for hopefully further cuts to come, and when we have seen further reductions to the Base Rate, people should really start to see the impact.

“However, it’s important to keep in mind that mortgage rates are widely expected to eventually settle at higher levels than previously, with the market view that the base rate may eventually fall to about 3.25%.”