The move is thought to be a reaction to stubbornly high inflation data and market expectations of further rate increases from the Bank of England.

Nearly 10% of mortgages have been removed from the market amidst concerns about rising interest rates, with around 800 residential and buy-to-let deals withdrawn. Data from Moneyfacts reveals that average rates on two- and five-year fixed deals have surged from 5.49% to 5.86% and 5.17% to 5.51% respectively since early June.

These rate increases will burden UK homeowners with an extra £9 billion in interest over 2023 and 2024, as 2.5 million individuals are expected to refinance at double the previous rates. One million homeowners on variable rate deals are set to face these higher costs.

The most significant impacts will be felt in London and the Southeast, where borrowing levels are at their highest. However, homeowners in Scotland will also face considerable pressure due to higher-than-average levels of household debt.

David Hannah, chairman of Cornerstone Group International, commented: “The rise in mortgage rates and mortgages being pulled by lenders due to inflation figures being stronger than expected is unwelcome news for homeowners, especially first-time buyers and those coming to the end of an existing deal.

“Homeowners who are coming to the end of their fixed-rate deals will be looking at refinancing with rates that are more than double what they were a couple of years ago. If you’re finishing a deal with a rate of 1.5-2% and you’re going onto a rate above 5% that’s going to have a big impact on your budget.

“This means many homeowners will be unable to afford the extra interest and could even result in people losing their homes. This will also add further pressure to a rental market which has already registered record prices this year.

“We are already seeing record levels of unaffordability in the UK property market and lenders such as NatWest and Nationwide withdrawing mortgage deals is only going to further exacerbate the situation for potential buyers in the property market.”

Financial predictions suggest the Bank of England may hike the current interest rate from 4.5% to as high as 6%, a rate not seen since the 2008 financial crisis. Furthermore, mortgage repayments on new loans made up 20.4% of borrowers’ incomes between January and April, the largest percentage since November 2008, according to UK Finance.

Nationwide and NatWest have increased mortgage rates by up to 0.7 percentage points, leading to significant annual cost increases for borrowers. Furthermore, the Bank of England’s monetary policy committee may trigger an additional increase of half a percentage point, taking the base rate to 5% - the highest since April 2008.

This situation underlines the urgent need to control inflation, with financial markets expecting the Bank rate to exceed 5%. These expectations, alongside a surge in borrowing applications, have pushed up the cost of borrowing further. The Bank of England is due to assess new inflation data and announce its next interest rate next week.