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The number of lenders offering home loans of £1m plus is falling but the big players remaining have told Mortgage Adviser they will stay in this part of the market despite a surge in demand.

The highest profile departure from the large loan market in recent weeks was Nationwide's decision to slash their maximum loan size for new customers by half to £500,000 at the end of April, citing the decision was a "prudent and sustainable" way to manage its business during the current crisis.

Wayne Preston, spokesman for Investec Private Bank, said banks and building societies reviewing their lending volumes had "played in our favour".

He said: "We have definitely seen an increase in activity and with the way a lot of the high street and the retail market has responded it definitely has created an opportunity for the private banks."

Ricky Okey, managing director of Abbey for Intermediaries, said: "With the market the way it is at the moment lenders have to be careful not to overexpose themselves in this area, but we are committed to this part of our business."

Alison Taylor, corporate affairs spokesman for Citi Private Bank, said: "Demand for large loans remains strong. To reflect the current credit market it has been necessary for us to increase pricing."