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Northern Rock 'might repossess thousands of homes'

Northern Rock could force out thousands of customers from their homes after they default on loan repayments, the bank admitted yesterday.

This could prove very politically embarrassing for the government, as the lender was nationalised after suffering in the credit crunch - and is now backed by taxpayers.

The beleaguered firm also announced millions of pounds of losses for 2007 - and said that it would shed 2,000 workers by 2011 in a bid to cut costs.

In 2007, the number of Northern Rock customers who had homes repossessed increased by 234 per cent, the Daily Mail reports.

On average, six homes per day were taken over last year.

Ray Boulger at mortgage brokers Charcol said: "From a political point of view, it could be very damaging for the government."

It is thought that many who will face repossession will have taken out the bank's Together loan - which combines a deposit-free mortgage with an additional personal loan worth 25 per cent of the property's costs.

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