Abbey mortgage removes products

The new mortgage regime which came into force this week has created chaos, according to industry sources.

Critics say the handing over of regulation to the Financial Services Authority (FSA) has led to customers facing delays, extra costs and worse deals than before.

The FSA claimed its new rules would benefit the 2.75 million consumers who take out a home loan each year.

But experts say it has plunged the market into disarray, the Daily Mail newspaper reports.

Rob Clifford of broker Mortgageforce said: "It is a sledgehammer. We have moved from a 14-page voluntary regime under the Mortgage Code to 1,000 pages from the FSA."

Lenders and insurers have spent millions in preparation for the regime and are likely to try to pass on the costs to customers through extra fees of up to £100 a loan.

Some providers, including Abbey mortgage, have temporarily removed some products because of the complex changeover.

Brokers have complained of delays because lenders, including RBS/NatWest, are not yet producing key documents online.

Some brokers and appointed representatives are unable to trade because their authorisation numbers are not available for checking.