Lenders have pulled almost 400 home loans and around 300 buy-to-let deals over the last week, while rates have risen, as firms react to the prospect of further Bank of England base rate rises. 

In the residential sector, Halifax, Newcastle Building Society, Kensington and MPowered Mortgages are among a large number of firms that have withdrawn selected fixed mortgage products over the past few days, data from Moneyfactscompare.co.uk shows.

While Aldermore, Foundation Home Loans and Tipton & Coseley Building Society have pulled their entire fixed rate range.  

The number of mortgages has fallen from 5,385 deals to 5,012, since the start of last week, the data group says.  

While the average two- and five-year fixed-rate mortgage have both lifted by 4 basis points to 5.38% and 5.05%, respectively.  

The moves come after inflation fell to 8.7% in the year to April last week, driven by clothing and food prices rising at their fastest rate for almost 45 years.      

This figure is down from 10.1% in March, but above the 8.2% figure economists expected, according to Office for National Statistics data.     

The ONS added that core inflation – which strips out energy, food, alcohol and tobacco – is at a 31-year high.      

This has caused investors to bet that interest rates, which rose by 25bps to 4.5% earlier this month, will rise “further for longer” this year, with some estimates as high as 5.5% by the end of the year.      

Moneyfactscompare.co.uk finance expert Rachel Springall says: “Borrowers searching for a new deal may well be concerned about the latest developments in the mortgage market.   

“Over the past few days, we have seen a few lenders withdraw selected fixed products, with some pulling out of the market, at least temporarily.   

“Product choice has started to fall, and as may be expected, average fixed mortgage rates are on the rise.   

“This volatility is down to the concerns surrounding future interest rate hikes, and lenders are reassessing their propositions. Consumers looking to refinance will find rates around 5% on average for a fixed deal, compared to around 3% a year ago.”  

In the BTL sector, Precise Mortgages Hodge and Marsden Building Society are among lenders that have pulled selected fixed-rate mortgage products in recent days.  

While Aldermore, Bank of Ireland UK, CHL Mortgages, Fleet Mortgages, Foundation Home Loans and The Mortgage Lender have pulled their entire fixed-rate range.  

The number of buy-to-let mortgages has fallen from 2,748 deals to 2,343, since the start of last week.  

While the average two-year fixed-rate mortgage has lifted by 3bps to 5.61%.  

Moneyfactscompare.co.uk’s Springall adds: “Landlords will be disappointed to see a drop in product choice and that average fixed rates are on the rise.   

“The volatility surrounding interest rates towards the tail end of 2022 started to improve, but as it stands, average rates are expected to keep climbing because of the ongoing concerns over future interest rate hikes.   

“BTL product choice dropped below 1,000 deals in October last year, in the aftermath of the fiscal announcement, so it will be a concerning echo of that period if choice plummets to such a low again.”