House prices are coming down, sellers are accepting offers as low as 20 per cent beneath the asking price and interest rates are at an historic low as a result of yesterday's 0.5 percentage point cut in the Bank of England base rate, to 1.5 per cent. So the conditions are in place, agents say, for 2009 to be the year of the bargain for homebuyers.

While lenders continue to impose restrictively high rates on borrowers who do not have big deposits, the extent of recent base-rate cuts - from 5.5 to 1.5 per cent within the past year - means that buyers who have enough ready cash (at least 25 per cent or more of a property's value) can now benefit from much lower mortgage repayments.

“We're getting to the stage where mortgage payments are becoming cheaper than renting. If this cut is passed on to borrowers, this could see prices bottoming out earlier than expected as sentiment towards buying will improve,” says Miles Shipside, of Rightmove, the property website. Buyers already seem interested: more than a million visited Rightmove on Christmas Day, according to the site.

Monthly repayments on the best-value loans available are now much cheaper than the top deals of a few months ago. For example, in October the best-buy fixed rate was 5.19 per cent. Now the best rate is 4.49 per cent for borrowers with a 25 per cent deposit, from Yorkshire Bank. A buyer taking out this deal to buy the £175,000 three-bedroom Wiltshire cottage featured on page 10 would pay a maximum of £729 a month - £53 less than if he had bought it at the same price at the 5.19 per cent rate in October.

Leslie Jacobs, the chairman of Mortgage Monitor, the broker, says: “With rates lower and prices falling, now really is a good time to buy, if you have the money to put down.”

However, anyone who needs to borrow more than 75 per cent - a group that includes most first-time buyers - may have to wait until lenders increase their “loan-to-value” limits to take advantage of lower rates and falling prices. Tony Addinall, of Badger Holdings, the property group, says: “What we really need is higher loan-to-value products becoming available to give potential buyers a chance of moving on or getting on the ladder in the first place.” However, lenders insist that pressures on their capital reserves continue to make it hard for them to offer these deals.

Homeowners hoping for an end to house-price falls can take heart: the ongoing lending squeeze coupled with falling interest rates may slow the rate of decline, according to some agents. “With the latest cuts pushing interest rates lower than they have been for 315 years, the pressure has lifted for many vendors who may have otherwise been forced to sell. It is therefore conceivable that we will see a constriction in supply over the next few months,” says Phil Tennant, a sales director at Hamptons International. “Lower interest rates will, as always, help to increase demand from potential purchasers. This combination of changes in both demand and supply could lead to less downward pressure on house prices.”

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