UK interest rates are now at a record low of 0.25, following the Bank of England's decision to cut the base rate - for the first time in seven years - by a quarter of a percentage point.
This will be welcome news to borrowers who now have the chance to save money on monthly mortgage repayments.
Those on tracker mortgages will be the immediate winners, with the Council for Mortgage Lenders calculating that on an average mortgage of £114,000, the cut would be worth about £15 a month.
While fixed rate mortgage holders won't see any immediate change, the cut may present an opportunity to shop around for a cheaper deal.
The Bank is also launching a Term Funding Scheme to encourage lenders to pass on the lower rates to households and businesses.
PROPERTY MARKET OVERVIEW
Many experts believe that cooling house prices and sales are in line with seasonal trends - as well as a consequence of years of rapid double-digit growth, which was tipped to slow at some point.
The Centre for Economics and Business Research forecasts growth in London this year, as well as in 2018, and beyond, with a comparatively modest 5.6 per cent contraction next year.
The Royal Institution of Chartered Surveyors anticipates a cumulative increase of 14 per cent for the next five years.
"Today’s news should come as a reassurance that the UK property market is in a more than stable condition," says founder of eMoov.co.uk, Russell Quirk.
"A cut in interest rates is the antidote for the post-Brexit worry and will, as a consequence, ensure that the UK economy continues to be underpinned by bouyant property prices.”
SO WHAT DOES IT ALL MEAN FOR BUYERS AND SELLERS?
What type of mortgages should you go for if you are buying now?
Fixed-rate mortgages are at an all-time low, so it's a good time to lock in the cheapest rates. "But be aware of early repayment cost fees. If you're thinking of moving before your mortgage term is up - look for a mortgage without these fees," says Ray Boulger of John Charcol mortgage advisers.
If you've got an unusually large deposit of at least 35 per cent, Boulger advises that you have a "once-in-a-lifetime opportunity" to get a 10 year fixed-rate mortgage at a very low rate.
Is now a good time to remortgage and take out equity?
The new interest rate reduction is unlikely to affect mortgage rates that much because they are already low. So, if you're looking to take out equity but have not reached the end of your mortgage term, you could be better off asking your current lender for an advance instead of taking out a new mortgage.
Is now a good time to buy?
The property market is expected to be quieter than usual over the summer and prices aren't rising - which puts buyers in a stronger position to negotiate a better deal. "Now is a really good time to start looking," says Boulger. "You can afford to take your time, put in a lower bid than you would have done a couple of months ago - and walk away if you don't think you're getting a good deal."
Is now a good time to sell?
July marked the start of the seasonal summer slowdown in the property market, which picks up again in September. However, there is still strong demand from buyers and a shortage of homes, so properties for sale at realistic prices should still sell quickly.
Leaders Estate Agents national sales director Kevin Shaw says: "While we have seen a small number of buyers attempt to renegotiate the price they are paying for a property, these requests have almost all been rejected and the sale has progressed as planned, showing that Brexit has had little impact on buyers and sellers, and their desire to move."
However, Rightmove director Miles Shipside believes pitching your asking price too high would be counter-productive in the current environment. He says: "Buyer affordability is already stretched and they will be looking for extra reassurance that they’re getting the best priced home to suit their needs. Pricing competitively will tempt buyers, some of whom are sitting on their hands."
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