Non-FD customers lose access to mortgages

The Internet banking giant First Direct, which is part of the HSBC bank, has recently announced that its mortgage products will no longer be available to consumers that are not customers of the bank effectively immediately. The move is said to be a temporary measure, and all of its mortgage products will be made unavailable to non-First Direct customers, including the two year fixed rate offset mortgage. The bank has confirmed that the products will still be available to its own customers.

Officials from the bank have stated that they have received record numbers of applications for home loans, and this temporary suspension will enable the bank to focus on the applications that it already has. A number of banks and building societies have had to put a hold on new lending over recent weeks, with some stating that they will only be able to lend to local customers and other putting a hold on new lending altogether. This comes as lenders continue to struggle to get finance on the wholesale money markets in order to fund their lending.

An official from First Direct stated: “We’ve seen unprecedented demand for our mortgages since January thanks to our highly competitive pricing and the decision of other lenders to raise rates. As a result, we’re currently seeing applications running at five times our normal volumes.”

He added: “First direct won its reputation for its amazing customer service and our first priority is to ensure we give all our customers the level of service they expect from us. 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. I’d like to apologise to customers for any delays they may have experienced and give them my commitment that we’ll not rest until we’ve restored first direct’s normal standards of service.”