There is an increasing number of customers struggling to repay their mortgages, according to the state-owned lender which took on Northern Rocks most toxic loans. They are setting out plans to help people who are struggling with the debt.
The UK is in the worst recession it has seen for more than half a century. UK Assets Resolution said in the first half of 2012 they had to change 34,000 mortgages to help their customers be able to repay.
The rising cost of living and the continued fall in house prices are continuing to affect people. The bank is warning the number of people struggling will continue to increase.
At the start of 2011 the government split Northern Rock in two, one part was sold to Virgin Money, which formed Northern Rock plc this was known as the 'good bank'. The other formed Northern Rock Asset Management (NRAM) this is known as the 'Rock bad bank'.
This was then paired with the other bailed-out lender Bradford & Bingley and UKAR was formed, they have 655,000 customers.
In the first half of 2012 repossession on homes fell by 15 per cent to 3,871, though there were 34,000 changes to mortgage arrangements and account changes to help customers to be able to make their repayments.
Richard Banks chief executive for UKAR said: 'Much of our focus is on helping those of our customers who are in financial difficulty and it is pleasing to see a further significant reduction in arrears levels despite the continued economic certainty and pressure on consumers' finances.'
Though they said around 10 per cent of their customers were struggling to keep up their repayments, the actual amount having three or more month's arrears dropped by 9 per cent, to 30,222 and the total amount of arrears fell by 8 per cent to £215.1 million.
Amid the credit crisis in 2008 Northern Rock was nationalised, this began the first run on a UK bank for 150 years.
Later that year Bradford & Bingley was also taken over by the government, the savings side of the business was sold to Spanish owned Santander.
In the first six months of the year UKAR reported a 6 per cent rise in pre-tax profits at NRAM which was £415.1 million.
In comparison to Bradford & Bingley who after making an additional interest payment to the Government, reported a 66 per cent slide in profits to £66.3 million.
Bradford & Bingley repaid a further £700 million to the Government loan, thus reducing its bill to £26.2 billion. NRAM returned £88 million leaving there bill at £19.6billion.
With sites in the North East and Yorkshire UKAR employs 2,500 staff.