Mortgage commentators have questioned Northern Rock’s future in the mortgage market following the Government’s decision to nationalise the stricken lender.
The Government said on Sunday that it will introduce emergency legislation to nationalise Northern Rock after it said two private takeover bids failed to offer the taxpayer sufficient value for money.
By opting for nationalisation, the Government has increased taxpayer liabilities to £110bn.
Chancellor Alistair Darling says deposit guarantees remain in place and it is business as usual for the lender. He says: “Northern Rock will grow and the taxpayer will gain from 100 per cent of any gain that may be realised.”
Thinc group director of mortgages Alex Murray says: “I find this laughable, mainly because Ron Sandler, who has been given the unenviable task of delivering this taxpayers’ rebate, has been commenting on slimming down the bank to a ‘more sustainable size’.”
The Mortgage Practitioner sole practitioner Danny Lovey says: “What are you going to have left after nationalisation? The Government wants its money back, so it will look to sell off the bank’s loanbooks and branches and to cut staff.I cannot see how it is going to be left as a core business in order for it to be denationalised.”
MortgageForce chief executive Rob Clifford says: “I think we can safely expect a period of benign activity, with the lender being completely risk-averse.”
John Charcol senior technical manager Ray Boulger says he would not be surprised if the Government decides to axe Northern Rock’s Together product due to the amount of bad publicity it has received.
Alexander Hall chief operating officer Andy Pratt beli-eves the Together loanbook is one of the assets that could be picked up early by other lenders or banks.
Premier Mortgage Service managing director John Malone considers Northern Rock’s branches could be snapped up by other lenders.