Last month, Northern Rock announced that in order to support the Government’s policy to increase mortgage lending capacity in the market, it was slowing down the rate of mortgage redemptions and this will lead to it repaying its loan to Government at a slower rate.
Northern Rock is currently ahead of its loan repayment target having, on a net basis, reduced the amount outstanding to the Government by £15.4 billion to £11.5 billion at 30 September 2008 (from £26.9 billion at 31 December 2007).
Government are pleased with the progress Northern Rock has made in repaying the loan. We are working closely with the company to develop an updated strategy and business plan. A full statement will be made in due course once the strategic review is complete.