HM Treasury  

Chancellor to sell £4.9bn Northern Rock mortgages

Chancellor to sell £4.9bn Northern Rock mortgages

The chancellor is to sell further loans worth £4.9bn acquired by the taxpayer during the financial crisis.

Following a competitive auction, the sale of NRAM mortgages and unsecured loans, formerly part of Northern Rock, has been approved, according to a government announcement this morning (April 2).

Two portfolios of mortgages will be sold to investment bank Citi and the majority of financing is being provided by Pimco, a bond manager.

The sale is a major milestone in the plan to recover taxpayers’ money and pay off the country’s debt, according to HM Treasury.

The Chancellor of the Exchequer, Philip Hammond, said: "Through our careful oversight of the country’s finances we are continuing to recover significant amounts of money that were loaned during the financial crash.

"Today’s sale enables us to recover the full amount taxpayers loaned to Northern Rock and Bradford & Bingley, helping us pay down our debts and strengthen our finances for the future.

"A key element in selecting the successful bidder was the treatment of customers. All bidders were required to agree to a non-negotiable package of customer protections before their bid was considered."

The chancellor said customers would see no changes in the terms and conditions of their mortgages, and would have the same protections they currently receive under UKAR’s ownership today.

"The proceeds from the sale will be used to fully repay the loans provided by the Treasury to NRAM and Bradford and Bingley plc and reduce public debt," he added.

The sale brings the government closer to the final disposal of NRAM and B&B announced in the Autumn Budget 2018.

It had already authorised a £13bn sale of the Northern Rock mortgages back in 2015.

B&B’s and NRAM’s closed loan books are managed by UKAR on behalf of the taxpayer.

Following this transaction, UKAR now owns about £8bn worth of assets, down from about £14bn in September 2018 and from £116bn in 2010.