Prospective home buyers have shared how they have abandoned their plans and decided to continue renting property amid fears interest rates could soar.
Some experts are predicting that interest rates may have to rise to as high as 6%, which would saddle homeowners with thousands of pounds more in mortgage payments per year.
Meanwhile, several leading UK banks have withdrawn mortgage deals over fears the Bank of England will raise interest rates in response to the fall in sterling’s value.
Some who have been saving for a property have already been forced to put their plans on hold.
Robin Price, a prospective buyer, told the BBC that he has been putting money aside for years but has seen his hopes dashed. “I can't find anywhere that I can afford a mortgage on in London or Essex because I don't earn enough,” he said.
Mark Pepperell, a home owner, told reporters that he will see his mortgage payments rise by £250 every month. “It's a hard pill to swallow… We're comfortable, putting money back into restaurants or retail… But those things are going to have to stop.”
Analysis of the market by Moneyfacts.co.uk found that on Friday, the day of the mini-budget, 3,961 residential mortgage products were available.
By Monday, the total had fallen to 3,880. By Tuesday, it had shrunk further to 3,596 deals – a reduction of 365 compared to Friday.
Rob Fish, a man in his thirties, told the Times that he was planning to move house with his wife but feels the family are no longer able to afford to.
“There are so many unknowns around the cost of living that it made us question whether this was the right time to buy,” he said.
“Moving to a bigger, more expensive house when interest rates are on the up is quite a scary combination.”
Mother-of-two Verity Blair told the Mail Online: “We are finally in a position to buy a family home outside of London, but the price point we were looking at in February of this year, just six months later would mean our monthly mortgage payments would double - from approximately £2,000 per month to £4,000 per month.”
Virgin, Halifax and Skipton are among the lenders who have taken some mortgage products from the market.
Virgin Money said: “Given market conditions we have temporarily withdrawn Virgin Money mortgage products for new business customers.
“Existing applications already submitted will be processed as normal and we'll continue to offer our product transfer range for existing customers.
“We expect to launch a new product range later this week.”
Halifax said that it was withdrawing mortgages that come with a fee.
“As a result of significant changes in mortgage market pricing we've seen over recent weeks, we're making some changes to our product range,” it said.
“There is no change to product rates, and we continue to offer fee-free options for borrowers at all product terms and LTV levels, but we've temporarily removed products that come with a fee.”
The Skipton Building Society said that it had also withdrawn its offers for new customers, in order to “reprice” given the market movement in recent days.
