Twenty-nine per cent of first-time buyers (FTBs) have cited mortgage rates as one of the biggest blockers to homeownership, Mortgage Advice Bureau (MAB) has found.

The firm’s latest research comes as mortgage rates have continued to drop throughout the year.

Although there was a "summer of optimism", MAB said, rates have increased slightly in autumn, leading to many within the industry predicting a period of higher for longer interest rates.

As a result, 24% of FTBs have stated that they are worried that rates won’t drop quickly enough in the coming years for them to be able to afford to buy.

Furthermore, MAB found that 31% of FTBs said they are also worried about keeping up with repayments and the general affordability of the loan.

The average mortgage rate for a five-year period is currently 5.09%, which is a slight drop from 5.18% in March this year.

However, MAB said that in general, some lenders have moved rates higher as the end of the year approaches due to higher borrowing costs.

Head of lending at MAB, Danny Belton, said there are challenges facing FTBs but still opportunities to be had.

He concluded: "Rates have risen since the summer as shifts in the global economic environment have driven up borrowing costs for lenders. And it is understandable that higher mortgage rates cause concern for first-time buyers but they shouldn’t put off their homebuying dreams.

"Deals are still available and innovations like rental recognition products and a growing market for higher loan-to-value mortgages are helping first-time buyers to get onto the property ladder.

"For those planning to buy next year, starting early is key."

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