THE number of mortgage products available has fallen by 40 per cent during the past three months as lenders respond to the global credit crunch, a financial information group has said.

Moneyfacts.co.uk said the fall in the number of different products to choose from was steepest in the sub-prime sector, as banks and building societies pulled home loans for people with poor credit histories.

But it said the mainstream lending market had not escaped the cull as lenders took a more cautious approach across the board.

The group said there had been a 54 per cent drop in the number of different sub-prime mortgages available, with 4,371 different home loans withdrawn since July this year.

There was also a 72 per cent slide in the number of different buy-to-let deals available to people with adverse credit histories.

Mortgage expert at Moneyfacts.co.uk Julia Harris said: "Within three months, what was the fastest growing mortgage market is now suffering the biggest decline.

"In general it's the higher risk products that have been pulled, while many existing products have also seen more conservative limits applied."

She said the proportion of a property's value that lenders were prepared to advance had fallen, while products where people certified their own income were also in decline.

But the mainstream mortgage market has also seen a 16 per cent drop in the number of products available, which Moneyfacts said was unusual in a historically static market.

Overall 611 different mortgages have been withdrawn since July.

Moneyfacts said some of this fall will have been driven by crisis hit bank Northern Rock slashing its 230-plus mortgage range to just 70 products, while further falls could be accounted for by the merger of the Nationwide and Portman building societies.

It said the rest of the drop was down to lenders making more minor changes to their ranges, with many withdrawing their higher risk products, such as 100 per cent loans, or specialist deals, such as self-certification mortgages.