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B&B chair Pym tells MPs buy-to-let market “now closed”

Bradford & Bingley chairman Richard Pym has told MPs that the buy-to-let market is closed.

Speaking at a Treasury select committee hearing into the nationalised banks this morning, Pym who is now executive chairman following the resignation of chairman Rod Kent on Friday, said that the sector of the mortgage market that B&B specialised in is now closed.

He said: “Essentially the buy-to-let market in the way that we would have known it a year ago is now closed.

“Most of the lenders who were active have now withdrawn all their products.”

Pym was also challenged by MPs over his £326,000 unconditional cash bonus which he will receive over the next two years.

Former B&B chairman Rod Kent defended the bonus, claiming that at the time of Pym’s appointment it was necessary to attract a high calibre chief executive to an unattractive role.

Committee chairman Labour MP John McFall challenged whether B&B chiefs had been like the “Michael Fish” of the financial world by overstating the strength of the bank two days prior to it being taken into public ownership.

Pym said customer deposit withdrawals from the bank had accelerated rapidly over those two days with outflows increasing from £26m on the Thursday that the statement was made, £90m the following day and £200m by the Saturday when the FSA intervened.

McFall went on to say that Pym had inherited “a shambolic institution with a headache” when he took up his role in August this year.

Northern Rock non-executive chairman Ron Sandler and chief executive Gary Hoffman were also grilled by MPs at the committee meeting.

Hoffman said he was aware that Northern Rock had been described as having an “aggressive” repossession policy by the press, but denied that the nationalised lender’s progress in repaying the Government’s loan had been as a result of repossessing properties.

Sandler warned MPs that it was unlikely that it would be possible to return Northern Rock to private ownership in the short term due to the deteriorating conditions in the economy and housing market.

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