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| Version 5 | Version 6 |
|---|---|
| Northern Rock mortgages sold for £13bn | Northern Rock mortgages sold for £13bn |
| (about 7 hours later) | |
| The government has sold £13bn of former Northern Rock mortgages that taxpayers acquired during the financial crisis. | The government has sold £13bn of former Northern Rock mortgages that taxpayers acquired during the financial crisis. |
| The portfolio is being sold by UK Asset Resolution (UKAR) to US investment firm Cerberus. The deal is thought to be the largest financial asset sale to date by a European government. | The portfolio is being sold by UK Asset Resolution (UKAR) to US investment firm Cerberus. The deal is thought to be the largest financial asset sale to date by a European government. |
| UKAR was the "bad bank" set up in 2010 to run down loans made by Northern Rock and Bradford & Bingley. | UKAR was the "bad bank" set up in 2010 to run down loans made by Northern Rock and Bradford & Bingley. |
| The mortgages are being sold for £280m above their book value. | The mortgages are being sold for £280m above their book value. |
| The government has now sold more than 85% of the assets of Northern Rock, the Newcastle-based lender that collapsed in 2007 and marked the start of the financial crisis. | The government has now sold more than 85% of the assets of Northern Rock, the Newcastle-based lender that collapsed in 2007 and marked the start of the financial crisis. |
| Chancellor George Osborne said: "We are now clear that taxpayers will get back more money from Northern Rock than they were forced to put in during the financial crisis." | Chancellor George Osborne said: "We are now clear that taxpayers will get back more money from Northern Rock than they were forced to put in during the financial crisis." |
| TSB deal | TSB deal |
| Mr Osborne added: "The highly competitive process, unprecedented scale, and the fact that these mortgages have been sold for almost £300m more than their book value demonstrates the confidence investors have in the UK." | Mr Osborne added: "The highly competitive process, unprecedented scale, and the fact that these mortgages have been sold for almost £300m more than their book value demonstrates the confidence investors have in the UK." |
| Meanwhile, TSB Bank will buy £3.3bn of the former Northern Rock mortgages and loans from Cerberus. | Meanwhile, TSB Bank will buy £3.3bn of the former Northern Rock mortgages and loans from Cerberus. |
| That deal means it will become the mortgage lender to another 34,000 UK homeowners. | That deal means it will become the mortgage lender to another 34,000 UK homeowners. |
| Customers with former Northern Rock mortgages or loans do not need to take any action and there will be no changes to terms and conditions. | Customers with former Northern Rock mortgages or loans do not need to take any action and there will be no changes to terms and conditions. |
| BBC business editor Kamal Ahmed said it was very difficult to judge whether this was a good deal for taxpayers, because calculating the overall cost of the banking bailout was extremely complex. | BBC business editor Kamal Ahmed said it was very difficult to judge whether this was a good deal for taxpayers, because calculating the overall cost of the banking bailout was extremely complex. |
| "What people probably want to get to is a more normal situation with banks operating normally, serving their customers in the private sector. This at least is a step in that direction," he told the Today programme on Radio 4. | "What people probably want to get to is a more normal situation with banks operating normally, serving their customers in the private sector. This at least is a step in that direction," he told the Today programme on Radio 4. |
| Analysis: Kevin Peachey, personal finance reporter | Analysis: Kevin Peachey, personal finance reporter |
| The vast majority of former Northern Rock mortgage holders have been unable to switch to a better deal because lenders have not been keen to take them on. | The vast majority of former Northern Rock mortgage holders have been unable to switch to a better deal because lenders have not been keen to take them on. |
| Many have been paying a relatively high standard variable rate of 4.79%. | Many have been paying a relatively high standard variable rate of 4.79%. |
| Now thousands will be moved to TSB with unchanged terms and rates. | Now thousands will be moved to TSB with unchanged terms and rates. |
| However, existing TSB customers get a better deal - paying a variable rate of 3.99% if they took out a mortgage after June 2010, or 2.5% if they had one before then. | However, existing TSB customers get a better deal - paying a variable rate of 3.99% if they took out a mortgage after June 2010, or 2.5% if they had one before then. |
| "[New] customers will of course be able to speak to TSB about the options available to them, as they can do today," a TSB spokesman said. | "[New] customers will of course be able to speak to TSB about the options available to them, as they can do today," a TSB spokesman said. |
| But there is no automatic switch to a cheaper variable rate. | But there is no automatic switch to a cheaper variable rate. |