WHO would have thought several months ago that interest rates would be changed to a record all time low 0.25 per cent after seven years at what was considered an already unprecedented low figure 0.5 per cent.

Yet this is precisely what has happened.

Yet is this for the better?

One of our clients said that it was good news however I question this.

The reason for the Bank of England reducing rates is because they see the economic future as uncertain.

In levels of uncertainty you try to anticipate the consequences to take positive action to improve confidence within the market.

However at these levels of 0.25 per cent some would argue that the net results are not going to make much of a difference because the figures are too small anyway.

Turning to savers, the reduction in base rate is bad news.

The Government at one stage was encouraging us to save to provide us with some security later in life, an ISA being a classic example of a Government initiative which at least has some tax advantages.

Though bank and building society accounts offer basically almost no return. Consequently, savers have needed to look at other forms of income generation. Whether that be gilts, stocks and shares or property.

Given the potential of capital growth and yields in excess five per cent then many with lump sums or substantial deposits have gone down the buy-to-let front.

The reduction in rates could persuade others to consider this route.

However this must now be taken with a hint of caution.

The Conservative government has recently introduced changes to make Buy-to-Let less financially viable, what with increased stamp duty, reduced claimable interest on loans and higher rate tax payers now only able to deduct the lower rate of relief.

It was hoped the move would reduce the demand on smaller units to mainly that of first time buyers in a hope of preventing prices of what should be affordable first time homes escalating further out of control.

The net result of this is that Buy-to Let Landlords still continue to buy investment property as they have no other alternative investments and the government raise more taxes as a result.

Fine you may say.

However, if we return to the reasons for the base rate cut in the first place due to uncertainty, then this very uncertainty can result in Buy-to-Let landlords holding back because of their concerns about negative equity.

Should others including first time buyers do similar, then nobody buys and we return to a position of a declining housing market with prices dropping.