Bradford & Bingley borrowers face uncertain future

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by Gill Montia

Britain biggest buy-to-lender is being nationalised.

The Government has confirmed that Bradford & Bingley (B&B) will be taken into public ownership, although parts of the business will be sold.

B&B’s savings account business, which is worth around £22 billion, and its 200 branches are being acquired by Spanish banking group, Santander.

The group already owns Abbey and is in the process of acquiring Alliance & Leicester.

B&B’s £41 billion mortgage book will come into public ownership and may even be merged with Northern Rock.

For buy-to-let investors with B&B mortgages, the future is uncertain.

If the lender’s fate parallels that of Northern Rock, nationalisation will mean a deliberate winding down of its mortgage book.

Borrowers coming to the end of fixed-rate deals could be offered no alternative to B&B’s standard variable rate, an option too costly for many.

Those seeking to remortgage will find that buy-to-let lenders are far fewer than before the credit crisis, when HBOS, Lehman Brothers and others operated in the sector.

As in the mainstream mortgage market, where deals can be found, the best rates will be reserved for those with squeaky clean credit histories and large amounts of equity in their properties.