Arrears hitting building society

15 August 2008

The number of people falling into mortgage arrears has caused Britannia Building Society`s half-year profits to drop by 38 per cent, it has been reported this week.

Bad debts have taken a chunk out of pre-tax profits, from £81.7 million to £50.5 million, indicating UK homeowners are struggling.

The building society`s mortgage lending has also declined by around a half to £1.9 billion.

Additionally, around 720 homes were repossessed, mostly by the society`s intermediary lender, Platform, the Business Scotsman said.

The credit crunch is expected to continue for a while, according to group chief executive of the society Neville Richardson, who predicted the mortgage market would not return to normal until 2010.

He said: "This is a strong performance in a market that is unrecognisable from the same period in 2007."

Britannia`s figures also showed "a successful Isa [individual savings account] season" suggesting people are still trying to save.

Britannia was founded in 1856 as Leek & Moorlands.

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