Northern Rock Mortgage Bonanza

Northern Rock announced today it would increase its existing government loan to help fund £14billion of new mortgage lending and kick start the housing market.

The fully nationalised lender said that it would offer about £5billionn this year and a further £9billion of new mortgages next year to increase the flow of credit into the economy and help first-time buyers.

“Northern Rock is going to increase its lending,” said Alistair Darling, chancellor, on Monday, “against a background where a lot of foreign banks have withdrawn like the Irish banks and Icelandic banks..What I want to do is use Northern Rock to fill that gap,” Mr Darling told the BBC, adding that the bank would lend on “a commercial basis”.