Government agrees record £13bn sale of former Northern Rock mortgages as George Osborne says taxpayers will actually make a profit out of the bailout

Catherine Neilan
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(FILES) This file picture taken Septembe
The run on Northern Rock meant the government had to step in (Source: Getty)

The government has agreed a major deal to sell off £13bn-worth of mortgages, acquired during the financial crisis as Northern Rock crumbled.

The mortgages are being sold by UK Asset Resolution (UKAR) to Cerberus, in what is the largest ever financial asset sale by a government in Europe. There will be no changes to the terms and conditions of the mortgages sold, and customers have been told they do not need to take any action.

The mortgages are being sold for £280m more than their book value, which the government said demonstrated "the strength of global investors’ interest in the UK".

Chancellor George Osborne said the deal would mean British taxpayers actually profited from the bailout during the financial crisis. The National Audit Office estimates that in total the bank received around £85bn.

He added: "Today marks another major milestone in clearing up the mess left by the financial crisis, with the sale of former Northern Rock mortgages...

"The highly competitive process, unprecedented scale, and the fact that these mortgages have been sold for almost £300m more than their book value demonstrates the confidence investors have in the UK, which has only been made possible by the success of our long term plan."

The government has now exited more than 85 per cent of the assets of the former bank.

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