Commentary from Mark Beaton, Ellisons Solicitors, on the first Bank of England rate cut in four years:

"At the beginning of August, the Bank of England announced a cut in the base rate of 0.25% from 5.25% to 5% - the first rate cut in four years, although the decision was a narrow one in favour of the cut.

So, how has the market responded?

There is a report from Rightmove of an increase in interest on their website of some 19% in August when compared with the same period last year. However, many of us have clicked on their website from time to time (for all sorts of reasons – including general curiosity about properties near to us) when we have no intention of moving and ultimately clicks do not mean offers or serious interest.

Whilst the reduction in the rate is welcome many homeowners remain financially stretched with the cost of living and there is a concern that inflation is slightly above the Bank’s target and the inflationary pressures remain as we head towards the Autumn.

There is also the usual market force of supply and demand to be factored in and if interest in the market increases at a faster rate than the number of properties on the market then there will be pressure on house prices to increase resulting in higher borrowing to secure a property and higher monthly payments.

That said, the rate cut and the prediction of a further rate cut towards the end of the year with more to follow next year, together with the traditional increase in interest in the housing market following the end of the Summer holidays does (cautiously) bode well for the Autumn market.

Certainly activity in the market has been relatively high over the last few months and so this is a good base for the more optimistic outlook although references to a “buoyant” Autumn market may be overstated.

It is estimated that many borrowers have fixed rate interest mortgages in which case the reduction will make no immediate difference. With many of those fixed deals set to end in the next twelve months, borrowers will be hoping for further reductions before they have to remortgage or look to sell their current property and buy their next."