Halifax blasted for mortgage rate hikes

Halifax, Britain's biggest mortgage lender, has been branded as "cheeky" for ramping up rates for new customers in the wake of a massive taxpayer bail-out in 2008.

This comes after Halifax, which is part of the Lloyds Banking Group, set a new standard variable rate with no cap for new customers.

According to Halifax, it was forced to make the change due to a higher cost of funding through wholesale and retail markets.

Melanie Bien, of mortgage brokers Private Finance, said: "As taxpayer money was used to bail out Halifax when it got into difficulty, this move will be regarded by many as being incredibly cheeky."

Meanwhile, the buy-to-let mortgage firm Paragon recently reported a 32 per cent rise in profits.

The mortgage lender withdrew from the market in February 2008 but is back writing new loans after securing a ?200 million funding facility in September.

The current depressed state of the housing market has led to would-be home buyers renting in larger numbers and for longer periods, Paragon explained.