State owned lender Northern Rock has reported ‘continuing progress' in its trading statement for the first quarter of 2009. The bank has outlined a new business plan as a result of ‘significant change in market conditions since the original plan was agreed in March 2008'. In the past three months the company says it has: developed plans for a legal and capital restructuring of the business; significantly slowed the rate of mortgage redemptions; and developed plans for mortgage lending of up to £14 billion over the next two years, including up to £5 billion in 2009. Gross mortgage lending in the first three months of this year totalled £550 million, with applications increasing by around 70 per cent in March compared with February. Northern Rock said mortgage redemption rates slowed significantly in the last quarter, running at approximately half the average rate of 2008. Despite significant losses, the plan is now to put a structure in place that enables additional mortgage lending to take place, and to position the business appropriately for a return to private ownership. Gary Hoffman, chief executive, said that a rise in mortgage applications reflected pricing adjustments to Northern Rock's product range. "We remain committed to working with all our customers and to assist those who may be under pressure financially, providing the best possible support we can in all circumstances."
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