A loser in the waiting game

Cheltenham and Gloucester and Woolwich were first off the mark this week with cuts to their standard variable rate (SVR) after the cut in base rate to 3.5% by the Bank of England on Thursday.

Both lenders reduced their SVR by a full 0.25%, surprising observers and prompting calls for others to do likewise.

Simon Jones of Savills Private Finance said: "The rate cut should be further good news for borrowers. While we call for all lenders to pass on the full 0.25% at the earliest opportunity, we recommend borrowers opt for tracker products to benefit, as some lenders did not even pass on any of the savings after February's cut."

After the Bank's 0.25% reduction in February, the big lenders cut rates on average by just 0.15%.

Borrowers with a £100,000 interest-only mortgage who benefit from a full cut would see their monthly mortgage payments fall by around £20.

The National Association of Estate Agents responded to the base rate cut, saying it would not lead to a renewed surge in house prices but that it was good news for first-time buyers who were struggling to budget for the purchase of an expensive first property.