If there is a rush to buy in 2009 it will more than likely be either "fools rush in" or it would be Landlords cherry picking the best value repo's as lower rates can at last mean a profit on the rental income and a chance of a medium to long term Capital Gain.

In my opinion, the damage is already done both in the general economy and the housing market. The large 1.5% rate cut happened because the B of E were too slow passing on rate cuts in the last 6 months while they were trying to tame inflation. This rate cut will be good for the economy for one reason, it will make the recession shorter and hopefully not so deep, but people still have to beware of the unbelievably high rate of job losses in last 2 months and these are forecast to grow more by next year. 2009 is still going to be a bad year with more falls in house prices, more repo's, more jobs lost and as the stock market does normally begin to rise halfway through a recession then there will be only one way for Oil prices to go......Guess!

I know the above paragraph seems to be Gloom & Doom but it happens a lot more than once in a lifetime so get real and face up to it, we are just going in to "Technical Recession". This rate cut will not stop it happening.

There will very likely be more interest rate cuts over the next 8 or 9 months, and be prepared for range of 1.5% to 2%. This does sound good for homeowners and new buyers, not so good for pensioners relying on income from their lifetime savings in variable rate accounts. Also some journalists have reported that rates could go own to ZERO, I hope they are very, very wrong on that or we shall end up doing a JAPAN, where house prices fall for more than 10 years, economy cannot grow and Britain would end up in the Lost Decade too.

If the Government manage to steer us through a shorter, shallow recession and not into Deflation / Stagflation then in mid 2010 and 2011 the outlook will become brighter, but don't put your rose-tinted spectacles on too early like just after this Christmas......

This is great news.

It forces banks to take responsibility for their customers who have mortgaged in the past few years.

If they didn't do this, borrowers many of whom were on fixed rates of as low as 4.25% from a couple of years ago would be seeing increases to 7%, their equity eaten up by the crash. 15% national price drop means 25% drop in realistic terms and in some areas it is 40%. This means the majority of existing customers do not qualify for refinancing. Some may have had a 50% deposit, reduced to 10% and would have to refinance at high rates.

Coupled with recession, this would cause serious irrepairable damage to our economy.

The UK has frozen and people have been preparing to live on the breadline for the next few years.

For a small property an average person on an interest only mortgage could see their payments go up by almost £500.

If this happened, people would stop spending, vital to restore the economy.

Lenders are being forced to support their existing customers first.

Rates to new borrowers will be reduced but they could be higher than the variable rate or not far below.

They are not going to be offering mortgages at 4% - more like 5%.

Interest rate cut is a temporary measure. People need to be aware that rates are likely to go up and may not drop this low again for decades.

Rates of around 5% for new borrowers are low. If they dropped further there would be too much competition for property and we would see history repeat itself.

At 4%, a £200,000 mortgage would cost only £666 per month interest only. A capital repayment mortgage over 25 years would cost £1,055. This looks very cheap to alot of people even with recession and rising unemployment.

People are stupid if they think banks should keep their tracker mortgages on the market.

Interest rates are likely to go up within a year of purchasing a property. At best this might be delayed until 2010.

In London, prices are going to stop falling very quickly and it will become hard to find a bargain next year.

for those who are thinking of buying, do it now. It takes some time for an application to be processed and it is very easy to change the rate. they will change the rate for you well in time for you to exchange contracts.

If you wait until 2009, there will be a rush of people looking for a place to buy and there will be competition for property.

House price drops in November might happen because people are waiting for the new interest rates to kick in.

For those looking in suburbs and traditionally lower prices areas, it might be better to wait until next year.
The average 3 bed semi is still over priced.

But if you are looking in popular places such as London, there are several bargains on the market that will be gone very quickly.

Great news for anyone on tracker rate mortgages, but I feel sorry for those who bought houses in last year or so on fixed rate mortgages of 2 and even 5 years.

Surely it must be worth them considering if it is worth paying a penalty to get out of those high rates now. For some it will be worth it as long as lenders will start dishing out remortgages again..........

For savers though, it will be hard for those getting their money back from Icesave next month when all the decent rates will have disappeared.

3%! Wow! I don't think anyone saw that one coming...

Clare Francis has just published this article: What the interest rate cut means for you

Anyone else think the economy might be in a worse state than we've thought?

The Bank of England's Monetary Policy Committee will decide at noon today whether to cut interest rates. It's expected to be a cut of about 0.5 percentage points, but could be a full 1 percentage point, meaning Bank rate could be at 3.5%.

What would you prefer to happen? Are you a borrower who would like a bigger cut to help with your mortgage, or are you a saver who is worried about losing out? Do you think the financial institutions will pass on the full rate cut? What will this mean for you? Is it too little too late or will a cut bring a much needed boost for the economy?

Click reply to have your say...we'd love to hear your thoughts.