The Bank of England's Monetary Policy Committee’s decision to cut interest rates by 0.5 percentage points to 1 percent presents an opportunity for investors says one property company.

Property experts broadly welcomed the recent cut but still maintain other measures are still needed to stimulate the market.

But Savills see the current situation as creating more opportunities for investors. Yolande Barnes, head of residential research, said: “It is not the current rates that matter but more the longer term pattern.

“If low rates persist, this could spell a new era in residential investment. As rental returns available on investment properties start to look very attractive in relation to medium and long term dated gilts, we could see the point arrive at which institutions start getting into residential property in a big way.

“The combined effect of price falls and exchange rate movements has already stimulated serious international investor interest particularly in prime central London and we would expect this trend to continue.”

Lucian Cook, director of Savills Research, added: “The cut may well draw out of hiding some cash buyers who have been monitoring the market from a distance. With reduced returns likely to be available on any cash in the bank, this may just be the trigger the need to buy at a time when prices, although not at the bottom of the market, are becoming attractive for those prepared to take a medium term view on the housing cycle.

“For UK buyers, this impetus is likely to be restricted to cash rich investors and those who sold at or near the peak, cashed in on their equity and temporarily sought refuge in the rental market.”

The Council of Mortgage Lenders (CML) says the interest rate cut is unlikely to have a material affect on the overall state of the mortgage market.

CML director general Michael Coogan said: “While borrowers on tracker rates will welcome the rate cut, it is doubtful whether it will create the conditions to achieve significantly more new lending.”

Peter Bolton King, Chief Executive of the NAEA, said: “Interest rates are becoming a distraction for consumers and business alike. A cut does not help house hunters if major lenders do not pass it on – it simply increases the pain for savers.”

RICS Chief Economist Simon Rubinsohn believes the cut urgently needs to be supported by other measures.

He said: “There is still a real need to stabilise the economy and increase the supply of mortgage finance to ensure an orderly housing market. The various measures announced by the government should go some way to achieving this providing they are introduced as quickly as possible.”

James Thomas, Head of Residential Investment at Jones Lang LaSalle said: “Trading volumes will remain thin, though shrewd investors may be able to take advantage of current conditions and pick up bargains from distressed sellers.”

Liam Bailey, head of residential research at Knight Frank says the cut in interest rates shows the Monetary Policy Committee is clearly trying to get mortgage providers to increase their lending activity.

He added: “There are signs that activity is returning to the housing market, however prices will continue to be constrained by the difficulty many people will have in obtaining mortgage finance.

“The cuts may help to stimulate the economy and therefore the housing market later this year, however – but this will not be apparent for at least six months.”

Following the decision by the Monetary Policy Committee to reduce the Bank of England Bank Rate the Halifax announced it is passing the full 0.5 percent reduction on to existing tracker mortgage customers from 1 March 2009. Halifax will also reduce its Standard Variable Rate (SVR) from 4.5 percent to 4 percent at the same time.