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Brokers angry as First Direct shuts door to new borrowers

Brokers have questioned First Direct’s decision to stop lending to new customers rather than reprice its mortgage rate.

Hamptons managing director Jonathan Cornell says he was surprised by last week’s move. He says: “It was commercially a very strange decision. Anyone in the mortgage industry would say the rate it was offering was phenomenal. It could have taken the decision to reprice the rate higher and stay in the market.”

John Charcol head of communications Drew Wotherspoon says: “What is surprising is that it had a product that was market-leading for so long while others have turned their back on attracting new borrowers. The pricing has been around 0.5 per cent better than its nearest competitor.”

First Direct had offered a two-year fix at 4.95 per cent.

Chief executive Chris Pilling says the move has nothing to do with lack of funding but allows it to deal with the unprecedented number of applications received in recent weeks, at five times normal volumes.

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The mean season

It was a decent headline grabber at the time. Mike Webb, the former head of retail at Invesco Perpetual, proclaimed: “We could lose a generation of investors.”

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