Specialist lenders, which work with high-risk groups such as the self-employed or people with impaired credit risks, have come under pressure on costs

Homeowners face paying more for their mortgages as specialist lenders are hit by higher funding costs due to investors’ fears about Brexit and the global economy.

Fleet Mortgages, based in Hampshire, last week withdrew all of its products to new customers and said it was seeking funding. Secure Trust Bank, whose products span business and personal lending, is planning to pause residential mortgage lending because profit margins have been squeezed.

Other specialist lenders are also wrestling with higher funding costs in wholesale markets, putting pressure on profit margins. That could depress the number of mortgage deals on offer and potentially lead to mergers similar to Aldermore’s takeover by South Africa’s First Rand last year or the private equity acquisition of Shawbrook Bank in 2017.