A recent increase in average fixed mortgage rates could be the start of a longer trend, Moneyfacts has said.

The product data website shows that the overall average rate for two- and five-year fixed rates have increased by 0.09 per cent since the start of July, now reading as 2.08 per cent and 2.34 per cent, respectively.

Moneyfacts details that the biggest changes are occurring at higher LTV tiers for now. For example, at 85 per cent LTV, the average two-year fixed rate has moved upwards by 0.21 per cent in August to land at 2.32 per cent. The five-year fix here as also risen by 0.23 per cent, coming in at 2.57 per cent.

Product choice is also narrowing: the data shows that at the start of August there were 2,526 products on the market, a drop of 202 compared to the start of July and 2,696 fewer than there were at the beginning of March.

Moneyfacts finance expert Eleanor Williams says: “The introduction of the stamp duty holiday and record low average rates following an enforced period of shutdown for the market has seen demand for mortgages escalate in recent weeks. However, product choice and availability remain a key issue for mortgage borrowers.

“Until there is more certainty regarding the economic outlook and clarity around risk – which may well not become clear for some months, particularly until the government furlough scheme winds down at the end of October – it seems unlikely that the mortgage sector will bounce back to the levels of availability that we saw six months ago, especially in the higher-risk tiers, where high levels of demand combined with stretched operational capacity remain a concern.

“With reports that bank profits may be falling and providers needing to set more funds aside for further Coronavirus planning and potential defaults, this could signal the end of the historic low mortgage rates of recent months.

“Therefore, those looking to secure a new deal now may wish to move swiftly.”