Mortgages Uncovered

The partly nationalized building society Bradford & Bingley has just published its’ annual report and it clearly details that they will experience a troubled year ahead, however, it did show a 7% rise in pre-tax profit. The report also stated that it had occurred £507 million of mortgages that had turned sour.

The report, published a few days ago, also said that the firms had incurred the huge mortgage charges that had turned sour, from £22.5 million in 2007.

B&B admitted that most of their accounts had come into arrears on houses that had been reposed in the last three months.

The report also concludes that arrears rates are likely to continue deteriorating throughout 2009 and 2010.

The executive chairman, Richard Pym has presented a business plan to reduce the mortgage book at B&B from the current £42 billion to £36.3 billion by the end of the year 2011. He admitted that the rate of redemptions is slowed by the state of the economy and falling house prices.

“Many of B&B’s borrowers have limited alternative refinancing opportunities due to a combination of increasingly conservative lending criteria and a significant reduction in mortgage lenders’ appetite for buy-to-let and self-certified lending,” the business plan warns.