Monday evening's business news

Sep 29 2008 By Graeme King

The UK’s buy-to-let mortgage market has lost its biggest lender after the nationalisation of Bradford & Bingley.

Through its Mortgage Express brand, B&B was the largest lender to investment landlords in terms of both total advances during the first half of the year and the size of its mortgage book.

The group was one of the first lenders to specialise in the buy-to-let sector, and at its height accounted for one in every five loans advanced to investment landlords.

But now it will stop writing buy-to-let loans. Any offer that has been made will be honoured, but landlords who have only had a deal agreed in principle will not be able to proceed with the loan.

The group’s withdrawal leaves a massive hole in the already shrinking buy-to-let market and raises concerns that some investors could struggle to remortgage their properties.

At the beginning of July last year, before the credit crunch first struck, buy-to-let investors had a choice of 3,648 different mortgages.

Today that choice has shrunk to just 662, following the withdrawal of 27 Mortgage Express and B&B loans.

Royal Bank of Scotland shares have tumbled after its ABN Amro takeover partner Fortis was rescued in a three-way Government bail-out.

Fortis - Belgium’s largest retail bank and the UK’s third largest car insurer - was handed an 11.2 billion euros (£8.9bn) cash injection by the governments of Belgium, Luxembourg and the Netherlands. It was agreed last night in return for a 49% stake after shares plunged amid insolvency fears.

But RBS suffered on the London market as it emerged that Fortis must now sell its stake in ABN, bought as part of the RBS-led consortium’s takeover last year.

RBS shares dived more than 15% at one stage as nervous investors digested the news.

Around one million workers across the UK will soon have a little extra money in their pockets as the National Minimum Wage (NMW) increases on Wednesday (October 1).

The rate is rising to £5.73 per hour for workers aged 22 and over, £4.77 for 18-21 year olds and £3.53 for those aged 16 and 17.

The Government is also currently preparing a further crackdown on bosses who fail to pay the minimum wage, with tough new penalties set to come into force next April. An information campaign over the next six months will aim to make sure that every employer is aware of the changes.

The pound at 4:30pm was 1.8068 dollars compared to 1.8384 dollars at the previous close.

The euro at 4:30pm was 0.7978 pounds compared to 0.7933 pounds at the previous close.

The FTSE 100 index closed down nearly 5% at 4835.45.