Bradford & Bingley mortgage sell-off restarted

The original sale of the £16 billion worth of home loans had been put on hold in the summer.

But Treasury officials have now given UK Asset Resolution, the agency that manages its nationalised bad bank loans, the green light to to seek out buyers.

The entity set up to manage B&B and Northern Rock when they were nationalised during the financial crisis, confirmed that it is now sending out non-disclosure agreements to prospective buyers this week.

“We have received the necessary approvals and can confirm that we have launched the first phase of a programme of asset sales that could ultimately enable Bradford & Bingley to repay its £15.7bn loan from the Financial Services Compensation Scheme,” said a spokesperson for UKAR.

The sale is notable because of its size and because the majority of loans in the portfolio are to landlords, an area of the housing market that both the government and the Bank of England have warned may be overly risky.

B&B’s rapid growth was driven by heavy buy-to-let lending, prior to its collapse in 2008 amid bad debts and tanking of its shares, leading to a sale of its branches and deposits to Santander.

The government nationalised its loans.

However, B&B’s book has recovered strongly since the financial crisis, with the number of loans in arrears or repossession falling from 14,326 when first taken over by UK Asset Resolution to 2,803 this year.