The bank also stated that it was looking to sell its existing mortgage portfolio.

One industry expert claimed that this was a result of diminished margins against a backdrop of extreme political and economic uncertainty.

“Margins are being squeezed as rates race to the bottom in a bid for market share and Tesco [appears] to be saying that the numbers no longer stack up for [it],” said Andrew Montlake, director at Coreco.

“It’s a small blow to consumer choice, but thankfully there are lenders aplenty that are financially strong and keen to get money into the market.

“It is difficult for challenger banks to maintain this level of competitiveness for so long and to make inroads into the market.

“Lenders have to maintain a margin but, at the same time, they also need to maintain a responsible level of underwriting and risk.

“The positive is that this is not a knee-jerk reaction, but appears [to be] a reasoned and strategic withdrawal from the market."

Dilpreet Bhagrath, mortgage expert at Trussle, added: “It’s notable that growing competition and the challenging economic climate has limited Tesco's profitable growth opportunities, seven years after launching [its] mortgage products.”

Tesco Bank currently has more than 23,000 customers and lending balances of £3.7bn.

“Although fairly small, with just 23,000 customers, the loss of any lender takes a hit to consumer choice,” added Dilpreet.

“However, with mortgage rates still very low, any effect on the range of deals across the rest of the market is likely to be minimal.”