Wednesday 5 August 2009

Full scale of disastrous lending disclosed

Northern Rock has disclosed that 12,100 borrowers with the controversial Together mortgage - which allowed buyers to borrow 125% on the value of their home – have fallen into arrears.

The numbers are feared to rise even further as a result of rising unemployment. Industry figures for across the UK show 1,000 families a week are being evicted from their homes.

The bank, which was nationalised in February, also admitted problems with other home loans, saying the total number in arrears had risen to 3.92 per cent, from 3.67 per cent at the end of March and 2.92 per cent at the end of last year.

With around 565,000 borrowers across the UK, this means one in 25 are failing to meet their monthly mortgage payments. Nearly two in five borrowers are in negative equity, meaning they cannot sell their homes to pay off the loan.

The full report is available in today's Telegraph.

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