The government has sold £13bn of former Northern Rock mortgages that taxpayers acquired during the financial crisis.

The portfolio is being sold by UK Asset Resolution (UKAR) to US investment firm Cerberus. The deal is thought to be the largest financial asset sale to date by a European government.

UKAR was the “bad bank” set up in 2010 to run down loans made by Northern Rock and Bradford & Bingley.

The mortgages are being sold for £280m above their book value.

The government has now sold more than 85% of the assets of Northern Rock, which collapsed in 2007 and marked the start of the financial crisis.

Chancellor George Osborne said: “We are now clear that taxpayers will get back more money from Northern Rock than they were forced to put in during the financial crisis.”

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