View more on these topics

UKAR chief warns of “tsunami” of repossessions when rates rise

Britain will face a huge wave of repossessions as soon as interest rates start to rise again, according to the chief executive of the firm running £80bn of mortgages from bailed out banks.

In an interview with The Guardian, UK Asset Resolution chief executive Richard Banks says the projections for the number of people falling behind on payments could get “scary” if lenders did nothing to prepare for higher rates.

He says: “You can see if you don’t do something about it, you can see a tsunami. If you don’t get into the hills you could get drowned by this. If you don’t manage this properly it could get very messy.”

UKAR runs £80bn of mortgages bailed out by the taxpayer during the banking crisis. Banks says 23,000 of its 750,000 mortgage holders are more than six months behind with payments.

He believes a policy of “tough love” would be fairer to people facing long-term difficulty in keeping up payments on loans taken out when house prices were at their peak and personal incomes on the rise.

His warning came the day after the international bank regulator said the Bank of England, which has kept rates at 0.5 per cent for more than two years, would have to raise rates shortly to curb inflation.

Recommended

Professional process

Continuing our focus on the RDR transition, Kevin Cannon of MGP Chartered Financial Planners discusses the changes that need to be made

Government to revise short-service refund rules

The Government will amend short-service refund rules as part of wider reforms to the treatment of small pension pots. In its official response to the call for evidence on the regulatory differences between occupational and workplace pensions, published this week, the Department for Work and Pensions says it is “not convinced” by arguments to maintain […]

2017 and the savings landscape…

Anyone who is involved in the world of workplace savings will recognise that the last few months have been rather interesting to say the least. At the start of the year both employers and the pensions industry were braced for major changes to UK pension tax reliefs in the March Budget. Yet shortly before the […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There is one comment at the moment, we would love to hear your opinion too.

  1. I guess most borrowers on high Standard Variable Rate mortgages with no way out, being charge disproportionately to the low bank base rate and the poxy low savings rates, will find that whilst their lender is licking their wounds and recovering their losses that there is no sign of reductions due to their own outgoings and that the Lender is leading them down the path of ruin! I am sorry David but Goliath swallows you up in this fight!

Leave a comment