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.

The increase in total net lending to individuals in December (£9.1 billion) was below the increase in November and the previous six-month average , according to figures from the Bank of England (BoE).

Almost 180,000 people who took out two year fixed rate mortgages during the second quarter of 2005 are facing an increased monthly mortgage bill of an average of £185 per month, as the fixed rate period of their loans come to an end and base rate rises hike the standard variable rate of many mainstream mortgage lenders.