One in 20 Bradford & Bingley mortgage customers in trouble

Tuesday, 02 June 2009 10:51

Over five per cent of Bradford & Bingley mortgage customers have fallen into arrears, it was revealed today

The nationalised lender - which is encouraging borrowers to remortgage else as it winds down - is now being left with high level of buy-to-let borrowers and those unable to find a deal elsewhere.

In March 4.6 per cent of borrowers faced arrears of three months or more, but the bank's chairman has revealed this has increased to five per cent.

Richard Pym told the Times: "It's now above five per cent and it will continue to deteriorate for the remainder of the year."

However, he maintained the taxpayer would be repaid on loans from the Treasury and the Financial Services Compensation Scheme (FSCS), but My Pym revealed losses of up to £700 million could come this year.

Bradford & Bingley's push to encourage borrowers to remortgage elsewhere has been held back as many on buy-to-let mortgages are on low tracker rates and the mortgage market for this sector has almost halted.

"There are better deals than Bradford & Bingley out there," a Bradford & Bingley spokesman said.

"But for a lot of buy-to-let borrowers there aren't the deals."

He added the bank would continue to support borrowers that stayed and urged borrowers facing troubles to contact the lender.

"There is help to get out of problems and people are phoning quickly to get advice," he said.

When Bradford & Bingley was nationalised in September 2008, its savings business and branches were transferred to Abbey - which is now being rebranded as Santander.

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