In a recent announcement the Internet arm of HSBC bank stated that it would be restricting its mortgage lending activities by no longer offering mortgages to those that are not customers of the bank already. Customers of first direct will still be able to access mortgages from the lender even if they do not currently have a first direct mortgage, providing they meet the other eligibility criteria.

First direct is one of many banks and building societies that have had to restrict their lending over recent months as a result of the global credit crunch. Many have had to take various mortgage products off the shelves or have started to offer mortgages only to existing customers or those that live within a certain radius of the branch.

A first direct official said: “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. We’ve made arrangements for our parent company, HSBC, to make available a similar two-year fixed rate to non customers to help them with their mortgage needs in the meantime.”

Recent additions:

• Broker could be facing severe problems
• Financial difficulties loom for homeowners
• Interest rates on personal loans continue to rise
• Loans market still suffering due to credit crunch
• Avoiding risks with an unsecured personal loan

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