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| Bradford & Bingley mortgage sale raises £11.8bn | Bradford & Bingley mortgage sale raises £11.8bn |
| (about 1 hour later) | |
| The government has sold buy-to-let mortgages belonging to failed lender Bradford & Bingley for £11.8bn. | The government has sold buy-to-let mortgages belonging to failed lender Bradford & Bingley for £11.8bn. |
| Insurance firm Prudential and investment firm Blackstone have teamed up to buy the loans. | Insurance firm Prudential and investment firm Blackstone have teamed up to buy the loans. |
| The government took on the mortgages of Bradford & Bingley after rescuing the lender in 2008. | The government took on the mortgages of Bradford & Bingley after rescuing the lender in 2008. |
| UK Asset Resolution (UKAR), which has been handling the sale, says that terms and conditions for the 104,000 loans will not change. | |
| The deal is one of the biggest asset sales by a European government. | The deal is one of the biggest asset sales by a European government. |
| "The sale of these Bradford & Bingley assets for £11.8bn marks another major milestone in our plan to get taxpayers' money back following the financial crisis," Chancellor Philip Hammond said in a statement. | "The sale of these Bradford & Bingley assets for £11.8bn marks another major milestone in our plan to get taxpayers' money back following the financial crisis," Chancellor Philip Hammond said in a statement. |
| "We are determined to return the financial assets we own to the private sector and today's sale is further proof of the confidence investors have in the UK economy." | "We are determined to return the financial assets we own to the private sector and today's sale is further proof of the confidence investors have in the UK economy." |
| Assets sold | |
| Bradford & Bingley had been a conservatively-run building society, but in 1999 abandoned its mutual status and moved into riskier areas of lending. | |
| That strategy backfired in 2008 when the UK housing market slumped amid the global financial crisis. | |
| When Bradford & Bingley was rescued that year, its branches and deposit accounts were sold to Spain's Santander, while the government took over responsibility for the mortgages. | |
| UKAR was set-up in 2010 to manage that portfolio of mortgages, as well as loans taken on following the collapse of Northern Rock. | |
| It started with £116bn worth of loans on its books and the latest sale cuts those holdings to £22bn - of that £12.7bn originated from Bradford & Bingley and £9.7bn originally came from Northern Rock. | |
| UKAR says the remaining loans are a mix of performing and non-performing loans. Around half are residential mortgages while the rest are buy-to-let. | |
| A non-performing loan is generally classified as one where the borrower has not made a scheduled payment for more than 90 days. |