The credit crunch yesterday forced three of the UK’s biggest lenders to tighten up the supply of home loans and charge more for them in moves that are likely to put further pressure on the property market. Daily Telegraph, The Times

Millions of home loan borrowers now face higher interest rates as banks pass on higher wholesale funding costs as conditions worsen in money markets.

Home loans will also become harder to secure from today, even for those with unblemished credit records, as banks apply more stringent criteria to mortgage approvals and withdraw some competitive products to avoid being flooded by new applications.

'It is the law of supply and demand. There is less mortgage finance available and it is more expensive,' said HBOS, the UK’s biggest mortgage lender.