Northern Rock for “Temporary Public Ownership”

The bill to nationalise the UK’s 5th largest mortgage lender was published yesterday and is expected to become law as quickly as Thursday.

Having decided that the two remaining takeover bids (from the consortium led by the Virgin Group, and the Rock’s own management), did not offer “sufficient value for money for the taxpayer”, the Government will look to push through public ownership; with a move back into the private sector at the earliest and most prudent opportunity, being the end goal.

While this move is being labelled as “business as usual” by the Government, it remains to be seen how it will affect the banks 1,000,000 savers and 800,000 mortgage holders, let alone its 6,000 staff, for whom redundancy remains a worry.

However, as the terms of each borrower's mortgage will remain unchanged, there is no cause for concern, and they should follow the usual steps when their mortgage deal is due for renewal. Firstly speak to your existing lender to see what they can offer to retain your business, but always then compare this to the rest of the market, and if it’s in your interest, move lenders.

Looking at Northern Rock’s current mortgage range it seems likely that the best deals will be found elsewhere and if this uncompetitive stance continues, it is unlikely that they will retain many customers. Whatever you do it’s important that you start the review process early, allowing at least two months before the end of your current scheme.

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