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First Direct withdraws mortgages

Mortgage lender First Direct has closed its doors to all new mortgage applications.

The subsidiary of HSBC said that the sheer number of applications had forced it to stop offering mortgages to new customers.

It stressed that the move is in no way due to a lack of funds.

On the contrary, it said that its liquidity is in good shape and therefore it is able to offer market best rates - thereby attracting a record number of applications.

"The flood of interest in our mortgages has meant we're taking longer than we'd like to handle applications, especially from non-customers," said First Direct chief executive Chris Pilling.

"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 is the first major lender to withdraw its entire range to non-customers.