Home owners are celebrating the Bank of England’s shock decision to slash the base rate of interests.

But how much of a shot in the arm is it for an ailing housing market? Helen Geraghty reports.

Kent’s estate agents are breathing a small sigh of relief after the Bank of England announced a 1.5 per cent cut in interest rates.

Most main banks have already trimmed rates in response to the cut made by the monetary policy committee last week.

Matthew Harvey, of estate agent Coutts Byers, in Canterbury said: "This is a positive move from the Bank of England and has been followed by positive moves from banks and building societies.

"We are heading for a traditionally quiet time of year, so we are not expecting this to have a great deal of impact until early next year, but the market for spring will be a lot healthier as a result. The rate cut was certainly a positive surprise."

Philip James of estate agent Strutt & Parker in Sevenoaks, said: "The Bank of England has come up trumps! Slashing 1.5 per cent off the interest rate is a very positive and proactive sign. It is a clear indication that it is serious about galvanising the beleaguered property market.

"From the top to the bottom of the market, the reality is that what is needed is the ability to borrow money."

Richard Cotton, of Cluttons, property specialists with an office in Maidstone, said: "With the bank rescue plan now in place there is no longer an excuse for high mortgage rates."

The monetary policy committee had surprised experts with the size of the cut, as most commentators had expected a half per cent cut. The latest fall takes the base rate down to just three per cent. But some now believe it will fall further, perhaps even as low as zero per cent next spring."

Stuart Law, chief executive of Assets, a property investment group claimed the Bank’s "dithering" had led to the large rate adjustment. Do not be surprised if base rates end up at zero per cent in spring 2009," he said.