Moneyextra.com: Interest rate cut

Following today's interest rate cut, Richard Mason, Managing Director of Moneyextra.com, comments: "Today's further cut in interest rates marks a new low for millions of savers around the country - such small returns on savings is unprecedented and savers need to start looking elsewhere to find a decent return on their investment.

"As prices continue to tumble, investment opportunities within the property market are conversely growing and there are bargains to be had which are unlikely to be around for long. However, while today's drop in interest rates is good news for borrowers on standard variable rate and tracker rate mortgages, the cuts are not being felt where it's most needed - in the first time buyers market.

"Rather than encouraging banks to start lending again, the continuing decline in interest rates is decimating the UK mortgage market, as lenders struggle to pass on cuts, choosing instead to withdraw their products. Our data shows the number of available mortgage schemes has this week reached a new low, having fallen by 86% in the last 12 months.

"This leaves first time buyers, Buy To Let investors and anyone without a big deposit struggling to buy a property - of the 1,634 mortgages currently available from prime lenders, almost 90% require a deposit of 20% or more.

"Our research on the UK market this week revealed that over 5 million people are looking to buy their first property in the next six months, while more than 675,000 homeowners are looking to downsize, so there's a huge opportunity here.

"We predict that the first lender to take the plunge and start offering competitive mortgages with smaller deposits is going to be overwhelmed by the response from buyers."