First Direct halts new mortgage lending

  • Story by: Emma Ann Hughes
  • Magazine: MortgageAdviser
  • Published Wednesday , April 02, 2008

First Direct has become the first direct to consumers bank to temporarily stop offering any of its mortgages to people who are not already its customers.

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The bank, which is part of HSBC, said the withdrawal was to allow it to cope with the unprecedented demand for its range of mortgages.

First Direct said applications have been five times its usual levels.

Chris Pilling, chief executive of First Direct, 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."

"We want to be back in the market as soon as possible."