Average two-year fixed rates have seen their sharpest monthly increase for more than a decade between August and September, figures from Moneyfacts reveal.

The average two-year fixed rate across all LTVs rose from 2.08 per cent to 2.24 per cent over the course of the last month, according to the comparison website.

The month-on-month increase of 0.16 percentage points is the steepest since July 2009, in the aftermath of the last financial crisis.

Five-year fixed rates increased by almost as much from 2.34 to 2.49 per cent, marking the biggest rate increase since March 2011.

However, two and five-year fixed rates were 0.19 and 0.25 per cent lower respectively than pre-lockdown levels.

Average mortgage fees increased in September for the fourth consecutive month to reach £1,032 – the highest figure since February 2013

There were 2,412 deals available in September, which is 114 fewer than in August and the lowest product availability for a decade.

This also represents a 54 per cent contraction from March when there were 5,222 residential products on offer.

Moneyfacts finance expert Eleanor Williams says: “While recent surveys suggest that housing market activity has continued to increase over August, consumers may be disappointed to see that average mortgage rates have risen. 

“While rates remain lower than they were prior to lockdown, the level of increases seem to have gathered pace, doubling over the last two months. 

“If these were to carry on their current trajectory, within the next couple of months, consumers could face average rates in excess of those available prior to the onset of the pandemic.

“We have seen these notable rate increases occur while there remains limited product availability in the traditionally higher-rate, higher-LTV brackets, which prompts the consideration that once deals in those sectors are relaunched, average rates have the potential to increase even further.

“Although mortgage lenders may have anticipated tighter margins in 2020 following the intense competition in the market over recent years, the unexpected impact of the global crisis has resulted in these constricting even further.”

Williams adds: “In short, the combination of rising rates and fees, dwindling product choice and a race to take advantage of the stamp duty holiday, means that seeking independent, qualified advice at this crucial time would be wise to ensure that the best options for each individual’s circumstances can be pursued.”