Lloyds TSB to take over Northern Rock’s home loans

We all know that the mortgage market is shrinking at a fast rate, but Lloyds TSB home loans sector is set to increase. This is due to them taking over Northern Rock’s home loan market. Kirsty Clay, a spokesman for Lloyds TSB has said “The bank will assume a `substantial’ proportion of Northern Rock’s 180,000 fixed-rate mortgages, about 25 percent of total loans.” This new deal will help to reduce their loan book; the deal will also help them pay back £24 billion which they had to borrow from the Bank of England, following the money crisis that hit them last year.

Lloyds TSB has done a better job than most in these hard time, and with taking over Northern Rock’s home loan’s they will be able to increase their market share. This is great news for them, as the UK’s biggest mortgage lender is planning on pulling back; they predict that loans will fall by at least 50 percent. Ron Sandler, the Chairman for Northern Rock has said that they plan to increase the proportion of funding that it gets from its retail deposits and then hopefully return to a private ownership.

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