The number of mortgage products available to borrowers has increased since the Bank of England cut the base rate for the first time in four years, but pricing has failed to follow suit, analysis from a lender suggested.
Research from Octane Capital assessing the number of mortgages and average rates available to different buyer groups since August, when the base rate was lowered from 5.25% to 5%, showed there were more product options across the board.
Remortgagors saw the most improvement in product choice with a 2.7% uplift in available mortgages to 3,402, followed by homemovers who saw their options increase by 2.3% to 3,181 deals.
Smaller increases were seen in the options for first-time buyers which rose by 0.8% to 662 products, while from August to September there were 2,195 mortgages for buy-to-let borrowers, a rise of 0.2%.
Over this time, however, average mortgage rates have seen little change.
In September, the average remortgage rate fell by 0.18% to 3.81%, while there was a 0.06% reduction in average rates for homemovers which came to 3.7%.
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Meanwhile, average first-time buyer and buy-to-let rates stayed flat month-on-month at 4.41% and 2.83% respectively.
Better mortgage deals may be on the horizon
Octane Capital’s analysis suggested that more changes may take some time to be implemented.
Since the base rate was first held at 5.25% in August last year, the number of mortgage products available has risen overall.
Remortgagors have 17.9% more choice than they did last year, homemovers have 6.4% more options, while the products available to first-time buyers and buy-to-let borrowers rose significantly by 26.1% and 32.4% respectively.
Additionally, the average buy-to-let mortgage rate has dropped by 1.76% since the base rate was held last August, while homemover and remortgage rates declined by 1.13% and 1.1% respectively.
The average mortgage rate for first-time buyers saw a softer decline of 0.93% since last year August.
Jonathan Samuels, CEO of Octane Capital, said: “There’s no doubt that the base rate reduction seen in August of this year has helped to boost homebuyer sentiment and whilst the latest decision may have been to hold at 5%, we’re seeing an uplift in buyer activity as many look to take advantage of improving market conditions.
“In the short time since August’s rate reduction the mortgage industry has responded with confidence and, as a result, we’ve seen a boost in the level of mortgage products on offer to buyers across all market segments.”
He added: “However, we’re yet to see this confidence materialise with respect to a notable cut in the rates offered, but it’s only a matter of time before this starts to come to the forefront.
“Since the Bank of England made the decision to hold rates back in August of last year, rates have come down across the board and, with the outlook continuing to improve, we expect rates to continue to trend downwards over the coming months.”
