UK Money News
2nd April 2008
First Direct suspends new mortgage lending
First Direct has become the latest lender to move to limit its mortgage lending in the face of the credit crunch.
As of today, the firm, which is a subsidiary of HSBC, will suspend new mortgage lending for a limited period.
A statement from the firm claimed that it had been forced to do so in order to allow it to deal with surging mortgage application numbers, as borrowers recognised the competitiveness of its home loans.
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."
First Direct claimed that recently it has received five times the number of mortgage applications than would usually be the case.
Analysts attribute the demand for First Direct Mortgages to the tightening of lending criteria and rises in repayment rates recently imposed by rival providers.
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