The cut is expected to give a big psychological boost to the property market. Coventry Building Society said it would cut all its variable mortgage rates from 1 September.
Matt Thompson, head of sales at agents Chestertons, said: “Some buyers eagerly anticipated a cut of interest rates in order to pursue their property search. Last month, we witnessed the return of some buyer confidence as lenders introduced slightly more attractive mortgage products and the Bank of England’s decision to also cut rates will fuel buyer activity further over the coming months.”
Simon Gammon, Managing Partner, Knight Frank Finance, said: "Today's decision will have a limited impact on mortgage rates but it will be transformative for sentiment. There is a meaningful group of buyers that put off moving home in the wake of the mini-budget that can now push on with confidence. The Bank of England has been particularly cautious, so by opting to cut the base rate it has sent a real statement that inflation is largely beaten.
"The lenders have already cut margins to the bone, so this cut was pretty much priced into fixed rates. That said, we've seen that the larger lenders are happy to take a hit to profits to gain market share, so we may well see another round of marginal cuts in the days ahead."
