NORTHERN Rock has become the latest Government backed bank to pledge to wait at least six months before repossessing the homes of borrowers who have fallen behind with their mortgage.

The Newcastle-based bank said it was “formalising” its policy for owner-occupiers.

The move follows a similar pledge by Royal Bank of Scotland, in which the Government holds a majority stake, earlier this week.

The Northern Rock announcement came on the day the Government announced plans to help borrowers who are struggling to keep up with their mortgage repayments to stay in their homes.

Under the Government scheme, households that have temporarily lost their income will be able to defer mortgage interest payments for up to two years.

The initiative will cover mortgages worth up to £400,000, with the cost being borne by the Government.

The Council of Mortgage Lenders had predicted 45,000 homes would be repossessed during the whole of this year, the highest figure since 1995.

Northern Rock’s chief executive Gary Hoffman said that in “the vast majority of cases” Northern Rock already worked with a customer for well over six months but was “formalising”

the policy.

In cases where it did take over people’s homes, the bank had worked with customers for an average of 15 months from when they first got into arrears.

Fewer than one per cent of repossessions currently took place after less than six months.

Mr Hoffman said: ‘‘We continue to work with customers facing repayment difficulties to try and agree an acceptable debt management solution and avoid repossession.

‘‘We will now formalise our policy and agree not to repossess a property for a period of at least six months from the point of arrears.’’ The announcement came two weeks after Mr Hoffman denied claims, made in a Treasury select committee of MPs, that Northern Rock, which was nationalised in February, was repossessing three times as many homes as other lenders.

Mr Hoffman told the committee that repossession was always a “last resort”, and said: “It is not in a customer’s interest – and not in the company’s interest – for someone to have their home repossessed.”

Repossessions by the bank, which has an estimated 600,000 mortgages on its books, rose to 4,201 at the end of September from 3,710 at the end of June.

Nationally, repossession levels are increasing in the face of the economic downturn and rising unemployment, with 11,300 people losing their homes during the third quarter of the year, 12 per cent more than during the previous three months.

RBS announced on Monday that it would give struggling homeowners at least six months breathing space before it launched repossession action.