Northern Rock, the nationalized mortgage lender, said Wednesday it would wait at least six months before moving to repossess homes when payments fall behind.
The announcement came two days after Royal Bank of Scotland announced a similar waiting period.
Northern Rock said that fewer than 1 percent of repossessions happened in less than six months after a borrower fell into arrears.
"In the vast majority of cases, where repossession regrettably does take place, we have been working with the customer for well over six months," said Gary Hoffman, chief executive of Northern Rock.
Northern Rock's policy has been to work with each borrower to resolve difficulties.On average, that process takes 15 months, the company said.
The government nationalized Northern Rock, an early victim of the credit crisis, in February. The government also now owns 58 percent of the shares in RBS as part of a recapitalization program.