Today the Bank of England slashed the base rate by 1.5 per cent to 3 per cent, the largest cut since the 1950s, in a bid to help ease credit conditions.

Now, Simon Ainsworth, head of Residential Property at Napthens Solicitors, is welcoming the cut, saying it could be what the housing market needs. But he added that banks and building societies must pass on the interest rate cuts to borrowers if the market is to begin to recover properly.

With the UK economy widely held to be in recession, the housing market has suffered more than most with first time buyers unable to afford either house prices or mortgages.

Latest figures from the Halifax show that prices fell by 2.2 per cent in October, taking the total drop in prices to almost 14 per cent in the last year. Land Registry figures show that the average cost of a home in Lancashire in June was £152,927.

He said: “This announcement is good news as long as the banks react in a similar way. Lloyds TSB has already indicated they will follow suit and the cut is a strong and bold move from the Bank of England.

“Whether the lenders change their new products or not, there will be quite a number of people whose mortgages are tracker mortgages linked to the base rate, so their mortgage rates will go down as the base rate reduces. This will provide those borrowers with a noticeable reduction in monthly payments.

“Hopefully, with new mortgage products coming on stream reflecting the cut in interest rates, and a continuing drop in market prices, we will see much more activity from first time buyers.

“Now appears to be the time to jump into the housing market as a first time buyer, and it is the first time buyers who have the power to kickstart the housing market.”