First Direct has suspended mortgage lending to new customers. It has made this move following major service issues, after other lenders withdrew similar deals because of credit crunch-related funding issues.
HSBC-owned First Direct received five times its normal level of applications recently days after it started offering two-year fixed rate mortgage deals of 4.95%. It pulled its 4.75% two-year fix and replaced it with a less competitive deal.
First Direct’s chief executive, Chris Pilling, said: “The flood of interest in our mortgages has meant we’re taking longer than we’d like to handle applications, especially from non-customers. Rather than increase interest rates dramatically to discourage new applications, we’ve decided to withdraw temporarily from offering mortgages to non-customers until we’ve cleared the backlog.”
Source: UK Mortgages
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