Buy to let mortgages have seen the largest interest rate increase of any mortgage category according to new research.

Barrows and Forrester analysed UK mortgage interest rates and product availability across multiple industry sources and how this availability has changed since the start of the year, to reveal how the ongoing mortgage crisis is impacting the market.

The research – which covers the four mortgage categories of buy to let, remortgage, first-time buyer, and moving home – reveals that BTL mortgages have seen the largest interest rate increase since the end of Q1, rising by 0.81 per cent to sit at 4.5 per cent. 

This is currently the highest interest rate across all four categories.

The cost of remortgage products has increased by 0.24 per cent to sit at 4.03 per cent, while first-time buyer and remortgage rates have risen by 0.23 and 0.03 per cent respectively. 

But while first-time buyers will feel a glimmer of hope to have received the second-lowest rate increase, they may still find themselves in a difficult situation due to the fact that the number of products available to first-timers has seen the biggest reduction of any category. 

A 25.6 per cent reduction since the end of Q1 means there are currently an estimated 412 first-time buyer products on the market, by far the lowest offering across all four categories. The most products are currently available for moving home mortgages (2,270) despite recording a 15.9 per cent decline since the end of Q1. 

Remortgage products stand at 2,207 despite recording the biggest drop of 16.2 per cent.

The cost of mortgages is rising rapidly. 

Even before today’s inflation figures, the Bank of England forecasts that monthly repayments will increase by as much as £500 for current homeowners.

The managing director of Barrows and Forrester, James Forrester, says: “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.”