Why we wont get out of this recession for a while! Watch
In any case the BofE lowering interest rates has not really made much difference to first time buyers or people wanting to increase their mortgages to move up the housing ladder because the lenders are refusing to lend to most people so effectively the lenders have tightened monetary policy in the housing market regardless of the BofE's actions. The main effect of the BofE actions is it has kept mortgage repayments for those already on the housing ladder down, so that it allows people more disposable income otherwise the consumption part of aggregate demand would have collapsed.
Like you say people don't want more debt and most people are trying to pay down debt and save instead of spending so the issue is one of a saving glut and people not spending, so it is the correct monetary policy to keep interest rates low to try and get people to spend more and discourage saving.
The real reason we won't get out of this recession for a while is because we are relying on monetary policy for stimulus and monetary policy has pretty much reached the limits of its effectiveness as we are in a liquidity trap. We need to be combining this monetary policy with a fiscal stimulus in order to get out of the recession.