The latest 25 basis point rate cut is sure to lend some stability to the U.K. housing market but analysts say it will be some time before the positive effects are felt on the residential mortgage backed securitization front - where delinquencies continue creeping up.

"Any interest rate move down will obviously have a positive impact. When it will impact current arrears levels is arguable, there will always be a lag," said Fitch Ratings analyst Jeremy Deacon. For the next six-to-nine months, Deacon said he did not expect to see improved performance in delinquencies, and once they begin to improve the arrears that have built up will have to be treated - either worked out or mitigated out, which could lead to some capitalization of arrears if lenders can get delinquent loans current in the present low interest rate environment.

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