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Winkworth welcomes today’s decision to cut interest rates to a new record low of 1%. This news comes in the same week as the Bank revealed that it has lent £185bn to financial institutions since April last year. However, Winkworth believe the Bank still needs to do more to help restore lending levels.

Winkworth hope that the rate cut will continue to encourage renewed interest in property as an investment as interest on savings falls. Following today’s announcement, Dominic Agace, Managing Director of Winkworth Franchising Ltd commented:

‘In January we saw the highest increase in buyers looking since the credit crunch began. This is related to the fall in prices in 2008, and the aggressive interest rate cuts making it cheaper for new entrants on the housing ladder to buy than to rent. This is making it easier for those with capital to make a decision on when to make their purchase.

The rate cut today will help those looking to commit to purchasing a property leading to a small improvement in the housing market, whilst increasing the number of people looking for bargains. It is another small bit of good news for the property market, which, with a 25% drop in prices in 2008 is beginning to look more positive.’

With lending rates already at an all time low for those with a deposit, and property prices down by around 25% from 2007, buyers are starting to re-emerge. Charles Peerless, Franchisee of Winkworth International Developments, West End and Clerkenwell & City says:

‘The current record low lending rates are having a positive effect: December lending figures were three times better than expected and January saw a noticeable increase in activity in all aspects of buying.

I don’t expect a further drop to add greatly to the marked increase in buyers registering with us, as lending is already phenomenally cheap. I expect those sitting on the sidelines will continue to do so until they read about the improvement in the market in the press, i.e. later than those looking and buying now.

In West London, activity has also increased, Ian Dickson, Franchisee of Winkworth offices in Hammersmith and Shepherds Bush says:

‘Given that the base rate is already so low, a further small cut is unlikely to make much difference to the housing market, especially given the real rate that most borrowers are facing is in fact quite a bit higher than base.

However, as far as the housing market is concerned, the far more important picture is that we have seen registrations of new buyers increase by about 150% this year, compared to any time in the last six months or so. This is a really positive sign and buyers seem a lot more bullish than they did last year. The important point to consider when studying the central London housing market is not the new affordability derived from lower interest rates, but the massively more important affordability from house prices having fallen by circa 25% last year.

We reached the bottom of the market in central London at the end of last year, and now is a really good time to buy. Don't leave it too late - prices will start to creep up!’