Mortgage lending at Northern Rock reached £550m in Q1 2009

Gross mortgage lending at nationalised lender Northern Rock totalled £550m in Q1 2009.

The lender’s trading statement for the period states that this figure reflects mortgage completions and does not take into account its plans to boost lending by up to £14bn in the next two years.

Mortgage applications in March increased by 70% compared with February, while the society’s deposit balances for the quarter were £19.5bn.

Repossessed stock fell from 3,620 properties in December to 3,200 at the end of March, which the society attributes to its debt management strategies.

Mortgage arrears of more than three months have increased to 3.67% from 2.92%.

Northern Rock is one of the government-backed lenders that have signed up to the Homeowner Mortgage Support Scheme.

This allows borrowers at risk of repossession to defer up to 70% of the interest on their mortgage for up to two years.

The net amount Northern Rock now owes the government is £9.8bn compared with £8.9bn four months ago.

Gary Hoffman, chief executive of Northern Rock, said: “We are implementing our business plan which should allow us to move forward with our lending programme.

“A revised state aid application has been submitted and we are making good progress with the legal and capital restructuring of the business. We expect to complete this in the second half of the year.”

He added: “The economic environment remains difficult but our trading performance in Q1 2009 was in line with our expectations and we saw some early signs of mortgage applications increasing in March, reflecting pricing adjustments to our product range.”