Those with a small deposit of up to 10% of the property’s value could find it becomes a bit more difficult to get a competitive deal.

And these buyers are often first-time buyers looking to make their first step on the property ladder.

Lenders said they expect a slight reduction in mortgage availability in the next three months, for borrowers with a deposit of 10% or less, and even those with under 25% upfront could be affected.

Risk averse

Lenders also reported having a changing appetite for risk, and this has already led to a decrease in availability of unsecured credit.

However, mortgage default rates fell significantly in the last three months and lenders predict they will fall further.

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They added that there was no change in demand for mortgages, although the balance of products had shifted, with a rise in prime business and a drop in demand for buy-to-let deals.