Treasury sells £13bn of Northern Rock assets

Sale price £280m more than the “book value”, George Osborne announces

By Josh May

13 Nov 2015

The government has sold £13bn worth of mortgages acquired from Northern Rock during the financial crisis, the Treasury has announced.

George Osborne said the sale price was £280m more than the “book value” of the mortgages and meant the government would get back more money than it put into the failed bank.

The so-called ‘good assets’ of Northern Rock were bought by Virgin Money after the financial crisis, while the more risky mortgages were overseen by UK Asset Resolution (UKAR).

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UKAR today sold the mortgage package to Ceberus, a private investment firm, meaning 85% of the bank’s assets have been returned to the private sector. The £13bn will be put towards reducing the government’s debt, Mr Osborne said.

“Today marks another major milestone in clearing up the mess left by the financial crisis, with the sale of former Northern Rock mortgages,” the chancellor said in a statement.

“The sale, which raises £13bn for the British taxpayer, is the largest ever sale of financial assets by a British government, and we are now clear that taxpayers will get back more money from Northern Rock than they were forced to put in during the financial crisis.

“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.”

Osborne announced his intention to sell the mortgage package in his Budget statement this summer. The sale means the government has disposed of more than £24bn of public assets since April.

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