Not So Fast Darling Tells Rock

People seeking mortgages and new deals should benefit from the latest moves which are thought to be taking place behind the scenes at the Treasury.

The mad dash for cash by the newly-nationalised bank Northern Rock – which has led to repossessions and accusations that it’s acting in a way which is precipitous and stony-hearted – is believed to have irritated Chancellor Darling to such a degree that he now wants to change the rules governing the public monies which were injected into the Rock.

Stricken Northern Rock had £11.5 billion of tax payers money pumped into it and was instructed to pay it back to the government as quickly as possible. It was agreed that 2010 would be the deadline.

To meet the deadline the bank has been encouraging its customers to take their business elsewhere – to remortgage with other banks and lenders.

Consequently the cash has been pouring back into Northern Rock. It’s already repaid more than half its loans. But remortgaging by its customers has skewed the market.

There are still only a limited number of suitable deals being made available by other lenders – and former Northern Rock customers have been sucking them up.

Darling thinks that if he tells Northern Rock to take it steady – it’s still got plenty of time to meet its deadlines – such a move would have a helpful and stabilising effect on the beleagured property market.

But to make changes to the original terms of the loan agreement Darling needs to get permission from Brussels. Such changes would win plaudits from City based property strategists and analysts. It is estimated that customers of the Rock are swallowing up over £2 billion worth of mortgage loans which its competitor banks are currently offering.