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applications and arrears soar at Northern Rock
April 23, 2009
Mortgage applications to Northern Rock in March increased by 70 per cent compared with February. Total lending in the first three months of the year reached £550 million, although plans to boost mortgage lending by £14 billion in the next two years hhave not yet had their impact on the figures.
The quarterly statement shows how cautious the lender has been in recent months. The average loan to value of it new lending is just 48 per cent. Nevertheless, the nationalised bank saw the percentage of homeowners in arrears rise from 2.92 per cent to 3.67 per cent. The average figure for all lenders is just 1.53 per cent, an illustration of how much more risky were the loans made by Northern Rock before the market downturn and the move to public ownership.
Northern Rock is one of the government-backed lenders that have signed up to the Homeowner Mortgage Support Scheme which allows some borrowers to defer up to 70 per cent of the interest on their mortgage for up to two years.