The sale will mean the repayment of a Financial Services Compensation Scheme (FSCS) loan, which the government said marked a “major milestone” in recovering taxpayers’ money used to bail out banks at the height of the financial crisis.

There will be no changes to the terms and conditions of the mortgages, and borrowers don’t need to take any action.

Chancellor Philip Hammond, said: “We are determined to recover the money the taxpayer invested during the financial crisis as soon as we can.

“The sale of these Bradford & Bingley loans is yet another significant step in putting the crisis behind us.

“The proceeds of this sale will go towards reducing our national debt and securing a brighter future for the next generation.”

Following the transaction, UK Asset Resolution, which manages former B&B and Northern Rock mortgages, now owns around £14bn worth of assets, from £21bn in September 2017 and from £116bn in 2010.