Northern Rock, the UK’s troubled bank and mortgage lender, is now owned by the UK Government. Logo courtesy of Northern Rock.

Northern Rock, the UK’s troubled bank and mortgage lender, is now owned by the UK Government.

All shares in Northern Rock were handed over to the Treasury on 22 February.

The order bringing about the transfer to public ownership was made at 2307 GMT on 21 February – one minute after a parliamentary bill gained royal assent. The Banking (Special Provisions) Bill was passed in just three days, after the House of Lords backed down over demands for extra safeguards.

Ron Sandler, the new Executive Chairman of Northern Rock, and the other members of the new Board held their first Board meeting on Friday.

Mr Sandler commented: “I know these past months have been a turbulent time for everyone at Northern Rock, both for the staff and its loyal customer base. It is therefore of great importance to me and the new Board that as we go forward we create the stability to build a company operating on sound commercial principles that can be returned to the private sector, standing on its own two feet.”

It is the first major nationalisation since the 1970s, when about a quarter of British industry, including coalmining, steel, British Leyland cars, British Airways and energy companies, was in public hands.

Northern Rock also announced an end to its 125% “Together” mortgage and loan deal, which allowed customers to borrow to 125% of the value of their homes.

As a result, it is likely that tens of thousands of Northern Rock customers may eventually be forced to remortgage at much higher interest rates when their current offers expire.

Alliance & Leicester, Coventry, BM Solutions, Bradford & Bingley and Cheltenham & Gloucester have since also ended their 100%-plus loans for new borrowers, again leaving limited options for those who have borrowed more than the value of their property.