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Northern Rock pulls Together product range

Northern Rock has confirmed it is following recent moves by other lenders and will be pulling its Together product range from today.

Lenders Alliance & Leicester, Abbey, Coventry Building Society and Godiva Mortgages all announced on Tuesday that they would be pulling their 125 per cent LTV product ranges over the course of this week.

BM Solutions now remains the only player in the 125 per cent LTV market. Yesterday the lender admitted it was reviewing its product with no decision made as of yet.

Northern Rock’s Together product has faced criticism from MPs and the media claiming it constitutes reckless lending.

In the first half of 2007, the Together product range represented 26.1 per cent share of Northern Rock’s new lending. For the whole of 2006, it represented 31.4 per cent of new lending for the bank.

Northern Rock says that applications for the outgoing Together products will be accepted until 8pm today.

It says that completed paper-based applications can be dropped off at Northern Rock branches and sales centres, Mortgage Service Centres or area offices until 5pm today.

A Northern Rock spokesperson says: “We’ve recently made a number
of product changes in light of market conditions. Our new Together business
was falling to negligible levels and direct competitors have been pulling
their products which could have left us with a disproportionate amount of
business so we decided to remove the product from our range.”

Moneyfacts analyst Michelle Slade says: “It seem Northern Rock have finally given in to external pressures and pulled its high risk 125% LTV product.

“Since the 7 February Moneyfacts has seen Northern Rock reprice its whole mortgage range to an uncompetitive position compared with the rest of the market. This would appear to be an attempt to stave off taking on any new mortgage business. Northern Rock is at the start of a difficult journey and this appears to be one of the first of many prudent steps they are likely to undertake along the way.”

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