One in five B& B borrowers are in arrears

One-fifth of borrowers with Bradford & Bingley are behind on their mortgages with the number of arrears on the rise. A year ago, 200 people at B & B were working in its arrears department – today, there are 400.

The State-owned lender is now bracing itself for huge losses and will have to call on the taxpayer for more funds.

The number of borrowers who are more than three months in arrears on their mortgages is now 5% – up from 4.6% in March, and more than double the figure for last year.

Richard Pym, B&B’s chairman, said that loan losses this year would be between £600m and £700m, up from £500m last year,.

B&B has borrowed more than £20bn from the Government so far, and is set to borrow billions more.

Many of B & B’s struggling borrowers are buy-to-let landlords and Pym warned that a rise in interest rates could trigger a fresh wave of defaults, tipping many more landlords who are currently just covering their costs into difficulties.

The bank was taken into public ownership last September and its savings business and branches sold to the Spanish group Santander, which will be dumping the B&B name.

.