Spanish construction rebuilds after market collapse

Property developer Olivier Crambade founded Therus Invest in Madrid in 2004 to build offices and retail space. For five years business went quite well, and Therus developed and sold more than €300m of properties. Then Spain’s economy imploded, taking property with it, and Mr Crambade spent six years tending to Dhamma Energy, a solar energy […]

Continue Reading


Euro suffers worst month against the pound since financial crisis

Political risks are still all the rage in the currency markets. The euro has suffered its worst slump against the pound since 2009 in November, as investors hone in on a series of looming battles between eurosceptic populists and establishment parties at the ballot box. The single currency has shed 4.5 per cent against sterling […]

Continue Reading


RBS falls 2% after failing BoE stress test

Royal Bank of Scotland shares have slipped 2 per cent in early trading this morning, after the state-controlled lender emerged as the biggest loser in the Bank of England’s latest round of annual stress tests. The lender has now given regulators a plan to bulk up its capital levels by cutting costs and selling assets, […]

Continue Reading


China capital curbs reflect buyer’s remorse over market reforms

Last year the reformist head of China’s central bank convinced his Communist party bosses to give market forces a bigger say in setting the renminbi’s daily “reference rate” against the US dollar. In return, Zhou Xiaochuan assured his more conservative party colleagues that the redback would finally secure coveted recognition as an official reserve currency […]

Continue Reading


Carney: UK is ‘investment banker for Europe’

The governor of the Bank of England has repeated his calls for a “smooth and orderly” UK exit from the EU, saying that a transition out of the bloc will happen, it was just a case of “when and how”. Responding to the BoE’s latest bank stress tests, where lenders overall emerged with more resilient […]

Continue Reading

Categorized | Property

Homeowners could end up paying £2bn more if the bank rate rises

Posted on February 28, 2014

File photo dated 08/08/12 of the Bank of England. Inflation is set to dip below the Bank of England's 2% target for the first time in more than four years, thanks to retailers slashing prices and lower fuel costs. PRESS ASSOCIATION Photo. Issue date: Tuesday February 18, 2014. Many economists believe official figures today will reveal a fall in the Consumer Prices Index (CPI) to 1.9% last month from 2% in December, which will mark the first time inflation has dropped below the target since November 2009. See PA story ECONOMY Inflation. Photo credit should read: Yui Mok/PA Wire©PA

UK homeowners face a £2.2bn increase in mortgage repayments by December 2015 if the Bank of England raises interest rates, according to a report by Barclays Mortgages.

The increase is based on the bank rate rising three times to 1.25 per cent, which economists consider the most likely scenario.

    This is expected to mean that the average household would pay an extra 3 per cent on mortgage repayments, costing families £252 more a year.

    However the report, based on data from the Centre for Economic and Business Research, said UK borrowers could pay as much as £5bn more by the end of 2015 in the most extreme scenario.

    This “drastic but potential” situation assumes there are five rate rises between now and the end of 2015, taking the bank rate to 1.75 per cent.

    Andy Gray, managing director of mortgages at Barclays, said: “The overarching insight is that rates will rise in the medium term and so mortgage customers should be aware of the impact of any rises on their finances and review their mortgage arrangements accordingly.”

    Increasing rates could leave many homeowners at risk of falling behind on repayments.

    The Financial Conduct Authority last week published a report into mortgage lenders’ arrears management, asking them to identify customers who could fall behind on repayments if interest rates rise and have strategies in place to treat them fairly.

    AudioMortgage rates, investing in biotech, and with-profits

    When mortgage rates rise, how bad will it be? Jonathan Eley and guests also discuss whether the UK biotech sector is set for a boom, and whether with-profits policies are worth retaining

    Download mp3

    Yorkshire Building Society said earlier in the month that it will refund £8.4m to 33,900 customers in arrears, as many were incorrectly charged fees for falling behind on repayments.