UK mortgage lender Bradford & Bingley has announced losses of £26.7 million for the first six months of 2008.

The business has been rocked by investment losses, worsening margins and an increase in bad debts arising from the credit crunch.

B&B, Britain's largest buy-to-let lender, said bad debt charges on its lending had jumped to £74.6 million from just £5.3 million last year as more borrowers struggled to keep up payments.

It had posted a pretax profit of £180.4 million last year ago, before it was battered by turbulence in the financial and housing markets.

B&B added that it was cautious over prospects for the rest of the year as the housing market worsened.

It said: "In the light of continuing weakness in the housing market and the wider economy, we continue to expect arrears and repossessions to increase for the remainder of the year, although we will be putting further resources into tackling the problem."

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