Mortgage lending at Northern Rock accelerates

Wednesday, 04 November 2009 12:00

Mortgage lending at Northern Rock accelerated to £1 billion in the third quarter as the company moved toward its new target.

The lender added it would continue to increase lending in 2010 to hit its £9 billion goal in a third quarter trading statement. Mortgage lending for the nine months to September 30 was £2.3 billion.

Despite the extra lending, loan quality remains high, with an average loan-to-value of 55 per cent, the lender added.

However, conditions in the mortgage and housing markets "remain subdued" and the company said it remains cautious despite recent house price uplifts given rising levels of unemployment.

The bank continues to support struggling mortgage customers, and has to date "successfully assisted more than 1,000 customers facing financial difficulty to stay in their homes," it said in the report.

The nationalised bank has recently been told it will be able to be split into a 'good' bank and a 'bad' bank by the European Commission (EC).

Chief executive, Gary Hoffman, said: "The EC's recent decision to approve State Aid is an important milestone in the process of implementing the legal and capital restructure of the business. Our intention is to complete this by the end of the year."

Northern Rock also warned that arrears are still rising, although more slowly, and will be responsible for a loss this year.

• Tags:
• mortgage levels and takeup
,
• news