Northern Rock sees 21 per cent rise in repossession losses
Northern Rock has seen a 21 per cent increase in losses incurred in relation to repossessed homes, as the number of people defaulting on their mortgage begins to increase.
The data, from its Granite securitisation vehicle which was set up by the bank to raise money from investors, showed that the government owned bank suffered losses of £8.65m in December as a result of repossessing homes from those who had defaulted on their mortgages.
This compares with losses of £6.82m the month before.
Around 6.3 per cent of all mortgages held by Granite at 31 December were in arrears of at least a month.
This figure has risen significantly when compared with December 2007, when 2.19 per cent of all mortgages held by the vehicle were one month in arrears.
Figures for December 2008, however, showed a slight decrease in the number of homes in arrears when compared with November 2008, when 6.9 per cent of all mortgages were in arrears.
The data also showed that the average loan size per customer was £109,299, with the average loan-to-value (LTV) at 77 per cent.