Three of Britain’s biggest mortgage lenders have relaunched the first new tracker loans since the exodus from the market last week, but have failed to pass on the 1.5 per cent reduction to the base rate made by the Bank of England last week.

Abbey has introduced a two-year tracker with a rate of 4.99 per cent – 1.99 per cent above base – available for up to 75 per cent of the value of the a property. At the beginning of last week it was offering a two-year tracker at 1.29 points above base, or a pay rate of 5.29 per cent. Lloyds TSB has also increased the margins on its two-year trackers from 1.09 points above base to 1.79 points, or 4.79 per cent, for borrowers with a 25 per cent deposit. Alliance & Leicester has a new tracker requiring a deposit of 40 per cent at a rate of 4.89 per cent with a hefty 1 per cent fee.

Figures from the Council of Mortgage Lenders (CML) show that the proportion of borrowers choosing trackers were a record 34 per cent in September, up from 28 per cent in August, the highest level since comparable records began in 2005.

This is despite new evidence from the Bank of England showing that tracker rates soared to their highest level in more than seven years last month. The average rate for a tracker mortgage pegged to the base rate jumped from 6.12 per cent in September to 6.84 per cent in October, even with the surprise half-point cut in the base rate. Experts said that the rapid increase in mortgage rates was because of a sharp rise in the cost of borrowing between banks in the wholesale money market.

The new deals follow the continuing slide in three-month sterling Libor, the interbank money market rate that determines the cost of funding new variable and tracker deals. It fell by 0.04 basis points to 4.37 per cent yesterday, down from 4.42 per cent on Monday. This is the lowest rate in more than four years, although it is still more than 1 per cent above the base rate.

Meanwhile, the CML figures show that the seizure in the housing market worsened in September, with the number of people taking out a mortgage to buy a home plummeting by 57 per cent. Only 35,000 borrowers were granted a home loan for house purchase, down by more than 50 per cent from 80,000 in September last year, and 66 per cent lower than the peak level of 102,700 in August last year, the figures indicate. The number of first-time buyers also halved, plunging to 13,400 from 28,200 in September last year.

Brokers estimate that new home purchases represent only 25 per cent of mortgages being issued. Michael Coogan, director-general of the CML, called for more action to boost the market as data from the Department for Communities and Local Government showed that house prices fell by 5.1 per cent in the year to September, the biggest annual decline on record.

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