New evidence that Northern Rock owns a poorer quality mortgage book than its peers has emerged just days after previously unseen documents revealed the Government was warned that the taxpayer could lose up to £1.28bn by nationalising the stricken bank.

The number of repossessions and the value of problem mortgages in Northern Rock’s £40bn securitisation vehicle Granite, which holds the bank’s better loans, have jumped far more sharply than at rivals, according to research by credit rating agency Standard & Poor’s.

For the three months to June, S&P found that average monthly repossession numbers at Granite jumped from 134 to 353, while the numbers at other banks increased at a far slower rate. 'The figure implies that Granite accounts for one in every 13 properties repossessed in the UK over this period,' S&P said.

Financial Times