Skipton Building Society said its subsidiaries Amber Homeloans Limited and North Yorkshire Mortgages Limited agreed the sale of a £220 million portfolio of mortgage loans to “an affiliate of a fund managed by a global investment management firm.”

Skipton is the UK’s fourth largest building society.

“The portfolio is comprised of approximately 1,600 UK mortgages and the sale is designed to reduce the group’s exposure to current or recent non-performing mortgages,” said Skipton.

“Amber Homeloans Limited and North Yorkshire Mortgages Limited ceased lending in 2008.

“This transaction will have the effect of further strengthening the Society’s already strong capital position.”

Skipton said the financial impact of the sale will be reported in the Society’s interim results to be announced for the six months ending June 30, 2017, assuming the deal is complete prior to publication.

It said the transaction is due to complete by the end of April 2017 after which affected borrowers will be written to as soon as practicably possible.

“There is no need for customers to take any action now,” said Skipton.

“The sale is not subject to regulatory approval.

“Computershare will continue to service the loans after their sale and also become the master servicer.”

Morgan Stanley advised Skipton Building Society on the sale.

David Cutter, Skipton Group chief executive, said: “This is a good transaction for our members as it strengthens an already strong balance sheet and allows us to focus on our core target market.”