According to Moneyfacts, this was the first decline in availability since October 2020 and coincided with an increase in average fixed rates.
The average rates for two and five-year fixes rose for the fourth consecutive month as lenders adjusted pricing ahead of and in reaction to the increased Bank of England base rate.
For a two-year fix across all loan to value (LTV) tiers, the average rate increased by 0.06 per cent to 2.44 per cent from January to February. Five-year fixes rose by 0.05 per cent to 2.71 per cent.
Compared to last year, the average two-year fixed rate is down on 2021’s 2.53 per cent while a five-year fixed is slightly down on 2.73 per cent during the same month last year.
In comparison to pre-pandemic rates, two and five-year fixes were both down by 0.02 per cent respectively on the same month in 2020.
Eleanor Williams, spokesperson at Moneyfacts, said: “Such a small month-on-month reduction in numbers, rather than a cause for concern, could potentially be a sign of the market returning to a level of stability after a tumultuous couple of years. There are in fact 280 more deals than were on offer in February 2020 before the onset of the pandemic.”
Williams added that while fixed rates were not linked to the base rate, “following four months of consecutive rises, these rates are the highest they have been since August 2021”.
Variable rates and product shelf life
Average tracker rates fell in February, with two-year deals reducing by 0.05 per cent to 1.7 per cent and term tracker products dropped by 0.02 per cent to 3.51 per cent.
Compared to last year, a two-year tracker is down by 0.57 per cent while a term tracker product has increased by 0.77 per cent.
Tracker rates were also down when compared to the pre-pandemic market, with two-year deals down by 0.31 per cent and term trackers reduced by 0.21 per cent.
The average standard variable rate increased by 0.05 per cent in February to 4.46 per cent.
Products are also staying on the market longer than they were last month. Moneyfacts showed the average shelf life of a mortgage sat at 42 days in February compared to 28 days last month.
During the same period last year, mortgages stayed available for 40 days while in 2020 the average shelf life was longer at 56 days.
Williams added: “Prospective new mortgage customers may see that the average shelf life of a mortgage product rose from 28 days to 42 days in February, which meant that those looking to secure a new mortgage before potential further rate rises had more time to choose a product.
“This could suggest that lenders had already made many of their re-pricing decisions in anticipation of the base rate rise in December 2020 and therefore January saw fewer updates made. However, conversely, this lull in activity could be a reflection of lenders holding back on re-pricing decisions in advance of last week’s move, and so it may be a different story next month.”