The last 100% mortgage was scrapped when Abbey took it off the market on Wednesday 'until further notice', following similar decisions by its rivals. Along with the Woolwich and Alliance & Leicester, Abbey also hiked the cost of its loans, in the latest of a series of moves to tighten the grip on the mortgage market.

On Friday Britain's biggest building society, the Nationwide, revealed plans to stop home loans of more than £1m. Since the credit crunch began last summer, more than 70% of mortgage deals have disappeared.

Typically, today's buyer must have a deposit of 5% or more. And to secure a competitive deal, 25% is needed, as lenders charge higher rates for those with smaller deposits.
The Abbey is Britain's second biggest mortgage lender after the Halifax.

Explaining the withdrawal of its 100% loan, a spokesman said: 'This is normal given the current market conditions and is in line with recent moves by other lenders.' From tomorrow night, Woolwich, owned by Barclays, will withdraw all two-year and ten-year fixed mortgages and one five-year fixed deal.

The squeeze on mortgages now threatens real pain for home owners. If the Chancellor can't get the money moving again, the effect on house prices could be severe.
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