Moneyfacts.co.uk, the price comparison website, said that about 10 per cent of deals were pulled on Monday because lenders no longer had the money to finance them. Brokers gave warning that there were more rate rises to come. Abbey, Nationwide and Bristol & West, are all expected to withdraw some deals and announce rate increases before the end of the week.
In the past two weeks inter-bank lending has all but dried up prompting a string of rate increases.
Landlords have been hit worst so far. The number of buy-to-let deals fell by more than a quarter in the space of 24 hours on Monday. Banks have increased rates and further tightened lending criteria, adding hundreds of pounds to the cost of monthly repayments for those coming to the end of their fixed-rate deals.
Bradford & Bingley, which had been the country's biggest buy-to-let lender, closed Mortgage Express, its specialist mortgage unit. Birmingham Midshires, the second-biggest buy-to-let lender, and Bank of Scotland, both owned by HBOS, scrapped all fixed-rate buy-to-let deals and raised rates on remaining deals by up to 0.5 percentage points.
Lloyds TSB is set to increase rates on its two and three-year deals by up to 0.25 percentage points before the end of the week. Northern Rock has announced rate rises of 0.3 percentage points.
