'Lower interest rates might help me move out'

The Bank of England has finally cut interest rates for the first time in four years.

This modest cut from 5.25% to 5% signposts the way to lower mortgage, credit card and loan payments but also savings rates for millions of people across the UK.

At 25, James Willicombe decided to give up renting and move back in with his parents to save for a mortgage deposit. He's hoping August's interest rate cut is the first step to help him on to the property ladder.

The record store manager was among those who shared what impact interest rates are having on their lives.

"I stopped renting at the end of April as I realised I was only saving £100 a month," Mr Willicombe said.

"I had a chat with my parents and I thought the best thing to do was move back in for 12-18 months. I can save up to £1,000 a month now and if I carried on renting I would still be saving for a place of my own into my 30s.

"I'm guessing such a small cut in interest rates isn't going to lead to mortgage rates plummeting but it's a step in the right direction and it hopefully gives lenders the confidence to offer better deals."

He said he hoped by the time he had saved his deposit, mortgage rates, which are influenced by the Bank of England's base rate, would be lower.

Mr Willicombe works as a manager at Kelly’s records in Cardiff and said the cut in interest rates could also be good news for the store.

"If rates are lower there's less incentive to save so people might feel like they have more disposable income and be more willing to spend in the shop.

"We say in the store: 'Music is a form of escapism from day-to-day life.' So if people are in more of a feelgood mood they will be more willing to spend on luxury items like vinyl. We are hoping to see an increase in footfall in our store."

Anna-Marie Craven, 48, from Wales, said she put her detached cottage on the market after her mortgage rate more than doubled.

She is currently locked into a 4.8% mortgage, which rose from 2.2%, and is hoping to sell and downsize but is finding it hard to find a buyer.

"My husband was a serving police officer - when he died suddenly at the age of 51, I was left not only with a disabled little boy who at the time was 18 months old, but with the mortgage after the life insurance refused to pay out.

"I’ve managed now for over six years renegotiating on low rates but I can’t continue to pay on the new rate of 4.8%," she said.

Ms Craven said she hoped the Bank of England's rate cut would "stimulate the housing market" so she can finally find a buyer.

Nevertheless, she refers to herself as "one of the lucky ones".

"If I sell, I can then downsize and buy outright, but the housing market is tough right now," she said.

High interest rates have not been bad for everyone, though.

Carl Jones is a self-employed gardener who lives in Wiltshire and likes to have at least £20,000 in savings at any point.

He calls this his "zero", and it's a mentality he has from growing up without much money.

Because interest rates are high, he said he had made around £100 a month from his savings.

"I've never had debt in my entire life," he said, though he understands that others are struggling because of high rates.

Though the cut will reduce his earnings, Carl said "it won't be a massive change".

He said the period of high interest rates has been short, but it has still helped him to save a lot.

Rupali Wagh is a co-owner of Tukka Tuk street food in Cardiff. “I have never had so many conversations [with customers] about mortgages and expenses,” she said.

The interest rate cut has made her feel “hopeful” as it will eventually lower the payments on her business loans and means some customers will have more disposable income.

“It’s a small rate cut so I really do think it’s a good start. At least we know they’ve looked at it and said this is necessary.”

Ms Wagh remortgaged another restaurant, Tukka Canteen, in order to reopen it last week.

“Our mortgages are on fixed rates so there won’t be a change straight away. But for us and our directors, if our payments go down on our personal mortgages we will have a bit more money that we can invest back into the business.

“I’ve got more hopes for customers' personal incomes because if I have no customers I have no business.”