RBS are looking to do a deal for between £1.5billion and £2billion with Santander likely to offer £1.7billion to secure the purchase. If the deal does go ahead then it further strengthens Santander’s presence in the UK as they already own the former Bradford & Bingley and Abbey businesses.

RBS is 83% owned by the British taxpayer and is looking to balance its books after nearly collapsing under the stewardship of Sir Fred Goodwin.

The European debt crisis is unveiling similar signs of the subprime mortgage meltdown in the United States on 2007, with pressure and disruption in the financial system becoming more prominent as the problem gets worst by the day, according to a review by the Bank for International Settlements (BIS).

The BIS review said that the European Union’s (EU) trillion dollar rescue package might be able to help but could only halt the eurozone crisis on short-term basis and could do little in preventing a possible sovereign debt contagion.

The bank said that while a collapse such as the Lehman Brothers’ case may be remote for now, the decision of Standard & Poor’s to downgrade Greek government debt to junk bond status in April this year did not bode well and “may have more in common with the start of the subprime crisis in July 2007 than the collapse of Lehman Brothers in September 2008.”

Nationwide acquired a majority stake in the Dunfermline following its collapse in March last year and its intentions are to close the head offices of Cheshire and Derbyshire building societies and move their operations to Scotland.

It will create 150 jobs at Caledonia House in Dunfermline, but 75 will go as Dunfermline will no longer offer its own mortgage products. The net gain of 75 will bring the total employed at Caledonia House to 350.

The site will become a call centre and administrative centre for all three  brands, which will focus on savings and investments. From the end of this month Nationwide will also stop offering regional branded products so that all Nationwide mortgages will be in the parent company name, a move that Nationwide sources are suggesting is down to decreased demand.
Administrative offices in Macclesfield, Cheshire and Duffield, Derbyshire will close over the next two years along with 17 branches in the Cheshire and Derbyshire networks, because of low customer use and the proximity of other Nationwide branches.

The Cheshire Estate Agency will also close as it is not core to the Nationwide model. The overall impact of the group changes is a loss of 325 jobs.

This new product is available up to a loan to value of 90% but only if the buyers are purchasing a new Bovis home. It also comes with 3 years accident, sickness and unemployment insurance which starts the moment contracts are exchanged.

For the maximum 90% LTV, the rate is fixed at 4.99% for two years, after which it reverts to a lifetime tracker at base + 2.49% (currently 2.99%). A £999 arrangement fee applies.

Barclays’ head of mortgages, Andy Gray, says: “The deal struck today is about helping to get the housing market back on the right track but in a way that is sustainable in the long term.”

He adds: “This is about giving good rates at the right time which is excellent news for home-buyers and the housing market.”

Bovis Homes chief executive, David Ritchie, adds: “Many of our potential customers are struggling to save the higher deposits required by the mortgage market today and this innovative new product … will mean that more customers will be able to buy a new Bovis Home now, at a more affordable cost.”

The Cheshire is owned by Swindon based Nationwide Building Society and the HQ closure is in addition to five other local branches that Nationwide is due to shut. A spokesman for Nationwide said that the closure of the Castle Street HQ would take place within two years but that there would be a concerted effort to find any affected staff new roles in the wider organisation.

NAB chief executive Cameron Clyne has until now implied he saw NAB UK more as a consolidator of the sector rather than being one of the banks taken over.

However, it is thought Clyne may reconsider after the failure of the bank’s move on the RBS branches. Santander of Spain is thought to be the only remaining player in that auction. Analysts said NAB UK could fetch up to £2bn in a sale.

One analyst said: “BBVA would not be a contentious bidder for Clydesdale and Yorkshire banks. It has no presence in the UK and so would not trash NAB UK’s back office if it did acquire the assets. That would make it politically more palatable.”

It is understood that BBVA and NAB at one stage considered bidding jointly in the RBS auction.

Forming a joint venture in the UK is still thought to be one option, as is a partial stock market listing for NAB’s UK arm. But the possibility of a takeover by BBVA is gaining ground, as investment banks Morgan Stanley and Goldman Sachs advise NAB on its options for its UK arm.

NAB UK recently unveiled an 11 per cent jump in underlying interim profits, to £264 million, as average retail deposit volumes rose 12 per cent, to £22.5bn.

Mortgage provider Santander found that over the last five years 37% of first time buyers were single, compared to 29% who were married.

This is the first time single people have outnumbered married couples as first time buyers.

In the 1970s, 85% of first time buyers were married.

Santander said it was “surprised” to find that 29% of first-time buyers are single.

“This means some 716,400 people waited to find their spouse before taking the first step towards home ownership, showing traditional values die hard,” the mortgage provider said.

Coutts & Co, the private bank, and Adam & Co, a wealth management business, both have offices in the city.

RBS did not say exactly where the jobs axe would fall but said some of the reductions would result from introducing a new IT system.

It said the improved technology would decrease the need for back office workers, suggesting that the cuts might fall less heavily on customer facing staff such as those in Manchester.

The job cuts will be implemented over three years and will mostly be at Coutts, which employs 3,100.

The bank said in a statement: “We are working hard to rebuild RBS in order to repay taxpayers for their support and having to cut jobs is the most difficult part of this process.”

Since being bailed out by the government at the start of the financial crisis, RBS has cut more than 23,000 jobs of which 17,000 were UK-based.

Homebuyer products include a 4.68 per cent five-year fixed-rate, with a loan-to-value up to 70 per cent, and a five-year fixed rate at 5.79 per cent, with a LTV of up to 80 per cent.

Remortgage products include a five-year fixed rate at 4.88 per cent, with an LTV of up to 70 per cent, and a 5.44 per cent five-year fixed, with an LTV up to 75 per cent.