A growing number of mortgage lenders are restricting home loans to customers outside certain geographic areas or are capping the maximum amounts homeowners can borrow at £350,000 as the credit squeeze intensifies.

Nationwide, one of the UK's biggest lenders, has said that it will stop lending to first-time buyers who want to take out selfcertified mortgages where proof of income is not required. It is also stopping lending to all first-time buy-to-let landlords.