While mortgage product availability has increased, borrowers have yet to see significant reductions in mortgage rates following the first base rate cut in four years, according to Octane Capital.
Octane Capital analysed mortgage product availability and average rates across different buyer segments, noting changes since the Bank of England’s rate cuts in August.
Since the first base rate reduction of 0.25% to 5% in August 2024, the availability of mortgage products has increased for all segments.
Remortgagers saw the largest increase at 2.7%, followed by home movers at 2.3%.
First-time buyers experienced a rise of 0.8%, while buy-to-let investors had a 0.2% increase.
However, homebuyers have not yet benefited from notable changes in average mortgage rates.
The average rate for remortgagers fell by just 0.18% to 3.81% since last August, while home movers saw a decrease of 0.06%.
Rates for first-time buyers and buy-to-let investors remained stable.
Further research from Octane Capital suggests improvements are on the way. Since the rates were held at 5.25% in August 2023, available mortgage products increased significantly across all segments – remortgagers (+17.9%), home movers (+6.4%), first-time buyers (+26.1%), and buy-to-let (+32.4%).
The average mortgage rate for buy-to-let investors dropped by 1.76%, with home movers and remortgagers seeing declines of 1.13% and 1.10%, respectively.
First-time buyers saw a decrease of 0.93%.
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 five per cent, 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.”
