Royal Bank of Scotland subsidiary Direct Line is the first lender to pull out of the mortgage market temporarily in the run up to mortgage regulation.
The FSA requires lenders to lay out 'key facts information' uniformly so that easy comparisons between lenders can be made. This will come into effect on M-day (October 31) and the firm says its current computer system cannot cope with the demand.
Direct Line PR manager Lesley Ferguson says: “It seemed unfair for a customer to start their mortgage on our old computer system and then to change it soon afterwards. We thought it was more prudent to call a temporary pause, clear out the pipeline and then be in a position to offer customers our new system come M-day.”