Bradford & Bingley and Northern Rock will identify customers at risk of losing their homes in the coming months and warn them to put mortgage repayments ahead of spending on luxury items.

UK Asset Resolution (UKAR), which looks after around £80bn of mortgage loans for the taxpayer-owned lenders, will perform credit checks on customers it perceives as at risk, and contact them to warn that they could lose their homes if they default on their mortgage repayments. Richard Banks, UKAR’s chief executive, said that some struggling customers were being protected by low interest rates, but warned that a more pro-active stance was needed by lenders to address the threat of further default when the base rate rises.

In a statement issued by UKAR it said: "The vast majority of people we contact appreciate this assistance and we find that it helps prevent them getting into further difficulty. We believe this is acting responsibly and fairly.

"We always treat customers fairly. Where there are...Read more on this story: Credit Today online