B&B warns on mortgage arrears

Bradford & Bingley, Britain's biggest buy-to-let mortgage lender, warned yesterday that mortgage arrears had increased, echoing comments from other banks about rising consumer bad debts.

Bradford & Bingley, Britain's biggest buy-to-let mortgage lender, warned yesterday that mortgage arrears had increased, echoing comments from other banks about rising consumer bad debts.

The bank added that arrears were already levelling off. In a trading update, it said: "As predicted, arrears levels have shown a moderate increase with the rate of growth now flattening. Loan impairment provisions remain low."

Britain's major banks, including Barclays, HSBC and Lloyds, recently warned that bad debts were rising, but in unsecured lending, particularly on credit cards.

B&B said new mortgage lending had a slow start to the year but volumes have grown steadily every month. It said it was "comfortable" with analysts' forecasts for annual profits to rise 6 per cent to £297.5m.

Under its chief executive Steven Crawshaw, the group sold its non-core assets last year to focus on niche mortgage lending and branch sales. Mr Crawshaw, who took over in March last year, abandoned his predecessor's strategy and sold the bank's estate agency business and the loss-making mortgage broker Charcol, as well as axing 600 jobs.

B&B's fortunes are tied closely to those of the UK's slowing housing market, but Mr Crawshaw was confident the buy-to-let market would continue to outperform the wider mortgage market.