A total 472 residential mortgage products have been withdrawn from the market by lenders in the space of 48 hours, according to figures from Moneyfacts.

The financial information group said this equates to around 6.5% of the total residential mortgage market, which now stands at 7,164 available products.

Ongoing turbulence in the Middle East has dampened expectations of another interest rate cut from the Bank of England, with financial markets now anticipating higher inflation from the fallout of the US-Israel conflict with Iran.

Moneyfacts said the decline in mortgage product numbers is the largest fall since the aftermath of the Liz Truss mini-Budget in September 2022.

The biggest single day fall of residential mortgage products on record was the withdrawal of 935 residential mortgage products on 27 September 2022, which was over 25% of available mortgage products at that time.

“Recent days have been some of the most turbulent in the UK mortgage market since the aftermath of the September 2022 mini-Budget,” commented head of consumer finance at Moneyfacts, Adam French.

“In the last 48 hours, almost 500 residential mortgage products have been withdrawn as lenders reacted to rapidly rising swap rates. However, the scale is nowhere near the shock seen in late September 2022 when 935 products, which accounted for more than a quarter of the market at the time, disappeared in a single day.

“Many of these deals are likely to return within the next few days and weeks as lenders adjust their pricing to higher rate expectations.

“It’s unwelcome news for borrowers, as the prospect of falling mortgage rates has quickly given way to rate rises. How far they could go is now heavily dependent on how global markets and inflation expectations evolve as conflict in the Middle East unfolds.”

---