In a boost to those with mortgages, interest rates have gone down by 0.25%, the second cut this year.

In a widely expected move, the Bank of England’s monetary policy committee brought the rate down yesterday to 4.25%.

It is the fourth reduction from last year’s peak of 5.25% although the committee suggested further cuts are likely to be “gradual and careful”.

The decision by the committee will be welcome news for those with variable mortgages and those looking to buy and sell homes.

Some mortgage lenders have dropped rates over the past few months in anticipation of the Bank’s decision yesterday with some sub 4% offers available.

News of the rate drop coincided with the latest House Price Index from Halifax. In it, it was suggested house prices have returned to growth in April with a 0.3% increase after a 0.5% drop in March.

The annual rate of growth rose from 2.9% to 3.2% between March and April.

This put the average UK house price at £296,899, down just £48 over the past six months. 

UK house prices rose by 0.3% in April, an increase of just under £900. The annual growth rate also rose to 3.2%, its highest level so far this year. The average price of a UK property is now £297,781.

Sheldon Bosley Knight regional sales manager Lara Hawkins said: “A reduction in the base rate is always the estate agent’s friend. When coupled with an element of relaxation around affordability by mortgage lenders, it demonstrates confidence and reassurance the economy is stable, which in turn reflects positively in the housing market.  
“The House Price Index also reflects a more stable picture, again giving buyers and sellers the reassurance that if they are planning a move now, there is a good selection of homes available as well as a good demand.”

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