More than 20,000 mortgage customers at the government's "bad bank" could be pushed into arrears if interest rates rise by a percentage point, its chief executive said on Tuesday.
A rise of that scale would more than double the number of
He added that UKAR was increasing efforts to support borrowers who could get into trouble when interest rates rise from their record low of 0.5%. Financial markets expect the Bank of
UKAR manages the mortgage books of Northern Rock and
Banks said the impact of rate rises would probably be less damaging if, as expected, the Bank of
UKAR's number of customers in arrears fell 39% to 15,483 in the 15 months to the end of March. Banks said the fall was because of the work his staff were doing to help customers maintain their payments, as well as the economic recovery.
UKAR repaid £5.1bn of loans to the government in the 15 months to March, taking total repayments to £10.4bn and leaving £38.3bn left to return to the taxpayer. Banks said he expected the full amount to be repaid within 10 years.
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