Page last updated at 10:24 GMT, Monday, 19 January 2009

New Northern Rock lending policy

Northern Rock sign
The bank says that "all government guarantees remain in place"

Nationalised lender Northern Rock has been given longer to pay back its 26bn loan as part of government efforts to boost lending and the economy.

The bank had been encouraging customers to re-mortgage with other lenders so it could pay off the loan quickly, but this policy will now be relaxed.

"This means that more mortgage customers will the able to stay with Northern Rock," the bank said.

Northern Rock said "there will be no impact" on its savings customers.

We have decided it is not appropriate for Northern Rock to continue to shrink it's activities
Chancellor Alistair Darling

Northern Rock, which was bailed out by the government after a run on the bank in 2007, added that "all government guarantees remain in place".

The bank has been encouraging existing customers to remortgage to other lenders, when their fixed rate product deal ends.

Challenging climate

"We have decided it is not appropriate for Northern Rock to continue to shrink its activities, they have made substantial repayments to the government and is ahead of its repayment schedule," said Chancellor Alistair Darling.

"It is right for them to maintain their lending in the housing market."

He added that the decision was made in the climate when "you're facing the departure of foreign-based banks and some of the smaller building societies are not going into too much lending".

Northern Rock made its announcement on the same day that the government unveiled a second package of measures to support the banking system.

The measures include a scheme to offer banks insurance against them losing more money from their bad debts.



Print Sponsor


RELATED INTERNET LINKS
The BBC is not responsible for the content of external internet sites

FROM OTHER NEWS SITES
Daily Express Slump 'will last 9 years' - 1 hr ago
Guardian Unlimited Calls to nationalise banks as markets lose faith in bail-outs - 3 hrs ago
Reuters HIGHLIGHTS: Policymakers comment on rescue package - 6 hrs ago
Telegraph Britain's banking crisis 'may last for almost a decade' - 6 hrs ago
Fortune Dollar climbs on U.K. bank woes - 6 hrs ago



FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

BBC navigation

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.

Americas Africa Europe Middle East South Asia Asia Pacific