The exodus of lenders from the mortgage market shows no sign of letting up, with another 240 fixed and variable rate mortgage products withdrawn last week – taking the total number available to 5,485 – according to financial analysts Moneyfacts. Independent on Sunday

Only last summer there were nearly 16,000 products for sale. Most mortgages now withdrawn were geared towards first-time buyers or higher-risk borrowers, such as the self-employed. But this gives only part of the picture.

Last week, big lenders, including Abbey, Nationwide and Halifax, raised rates on new mortgages or increased the deposit required, affecting many people just looking to re-mortgage to a better deal.

'There is no sign of what is a vicious cycle for borrowers letting up,' said David Hollingworth, of broker London & Country. 'One lender raises its rates or deposit qualification; this then makes another lender a best buy; they get inundated with new business, can't cope or decide they do not want to be lending the sums involved and this leads to rates being raised or the product being withdrawn.'