Taxpayer bill for Rock to rise

The Treasury’s bill for Northern Rock’s losses looks set to increase, after one of the mortgage lender’s subsidiaries breached a contract, putting other creditors ahead of the taxpayer for repayment. Granite, a unit which securitised Northern Rock mortgages, will be forced to speed up the return of £26bn of debts to noteholders. Rock will be left more exposed to Granite as noteholders are paid back and exit their stakes. Granite is losing about £12m a month due to loan defaults, delays and repossessed houses being sold below their value.