The number of first-time buyer mortgage products has fallen by over a quarter since the end of Q1 2023, Barrows and Forrester's latest research has found.

Analysing UK mortgage rates and product availability across multiple industry sources, the research has studied how this availability as changed since the start of the year, revealing how the ongoing mortgage crisis is impacting prospective homebuyers.

With mortgage costs rising rapidly, the Bank of England has recently forecast that monthly repayments will increase by as much as £500 a month.

The research examined the four mortgage categories of buy-to-let (BTL), remortgage, first-time buyer and moving home. It found that BTL interest rates have risen the most since Q1 2023, increasing by 0.8% to 4.5%, becoming the highest interest rate across the four categories.

Remortgage products also saw a substantial increase in interest rates, rising by 0.24% to sit at 4.03%. First-time buyer and remortgage rates increased by 0.23% and 0.03% respectively.

Although first-time buyer rates were the second lowest increase, there has been a -25.6% reduction in the number of products available since the end of Q1, with an estimate of 412 current first-time buyer products on the market, which is the lowest of all four categories.

Despite the number of moving home mortgages available has declined by -15.9% since the end of Q1, the number of options remains high at 2,270 products.

Managing director of Barrows and Forrester, James Forrester, said: Depending on what you’re trying to achieve, you’re going to face a variety of different challenges as a buyer in today’s market. For example, first-time buyers are going to be severely restricted by the small number of products available to them which will prevent many from securing a mortgage.

“Lenders appear much more comfortable providing variety for those who already have a foot on the ladder, but even they are having to deal with cost increases and a significantly reduced selection of products.

“If the mortgage crisis deepens in the coming months, things could get even harder for buyers, but the silver lining is that, while tough, the current situation isn’t as severe as the market turmoil experienced in the 90s and more recently, 2007.”

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