Whilst we’re yet to witness a significant benefit in mortgage rate reductions following the first base rate cut in four years, it’s only a matter of time, with both product availability and mortgage rates having both improved considerably since rates were first held.

This is according to Octane Capital which has analysed both mortgage product availability, as well as the average rate offered. This was done across each buyer segment of the market, before looking at how this landscape has changed since rates were cut in August of this year and since they were held in August of last year.

The research shows that since August 2024, when the Bank of England implemented the first base rate rate reduction in four years with a 0.25% reduction to 5%, the level of mortgage products available has increased across the board.

Remortgagers have seen the largest increase in choice, wth 2.7% more mortgage products now available, followed by home movers at 2.3%. Whilst more marginal, first-time buyers (0.8%) and buy-to-let investors (0.2%) have also seen an increase in the number of products available to them in the current market.

But while product choice has increased, homebuyers are yet to benefit from any immediately notable change in the average mortgage rate on offer.

The average rate on offer to remortgagers has fallen by just 0.18% to 3.81% since last August’s base rate reduction, with home movers also seeing a marginal reduction of 0.06%. At the same time, the average rate offered to first-time buyers and buy-to-let investors has remained static.

However, further research by Octane suggests that mortgage market improvements are on the way and it may just take time before improving market sentiment filters through to buyers on the ground.

The analysis shows that since rates were first held at 5.25% in August 2023, the number of mortgage products available to all buyer segments has increased notably  – remortgagers (17.9%), home movers (6.4%), first-time buyers (26.1%) and buy-to-let (32.4%).

In addition, the average mortgage rate on offer to buy-to-let investors has fallen by 1.76%, both home movers (1.13%) and remortgagers (1.10%) have also seen the average rate on offer fall by more than 1%, whilst first-time buyers have seen the average rate fall by 0.93%.

Commenting on the latest data Octane Capital chief executive Jonathan Samuels 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.”

However, Samuels added that we’re yet to see this confidence materialise with respect to a notable cut in the rates offered, but he insisted 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.”