A number of lenders increased the price of their short-term mortgage deals yesterday, in spite of the cut to the base rate, indicating that costs would remain high for new borrowers. Financail Times, Daily Telegraph, Independent

Halifax, Nationwide, Woolwich and First Direct were among those who passed on the full quarter-point reduction to variable-rate mortgages. Borrowers with deals that track the base rate will automatically see the full cut. But first-time buyers and borrowers coming to the end of cheap fixed-rate deals look unlikely to benefit.

Alliance & Leicester yesterday released new, more expensive mortgage rates for the second time in a week. The first increase on Monday failed to stem the flow of business. Some of its best-offer rates are now 1.24 per centage points above the new base rate of 5%.

Nationwide also put up the price of many fixed rates and withdrew some products altogether, as did Bank of Ireland Mortgages.