Northern Rock has fared badly because without a large savings base to use as collateral on loans, it must seek support for loans on the debt markets. Until last year it was considered a stock market darling for its ability to tap into new markets, particularly among borrowers with few assets.
It became famous for its mortgages with 130% loans
to the value of the property that helped thousands of first-time buyers on to the property market. Borrowers would combine unsecured loans with their mortgage in order to buy a home. But the deal remained vulnerable to increases in interest rates and easy availability of credit on international money markets.