Bradford & Bingley (B&B) says it believes interest rates will either stay at their current rate of 4.75% or see one more rise to 5% before beginning to fall again.
Speaking at the lender’s annual general meeting yesterday, Steven Crawshaw, group chief executive at B&B said: “Whilst economic data at this stage in the cycle is, as always, uncertain we are seeing some return of customer confidence in our core residential lending markets and continue to take the view that we are at or within 25 basis point of the top of the current interest rate cycle.”
Crawshaw added that arrears levels for the Group had continued to remain under the industry average levels and that while there had been an increase in arrears these remained within expectations. The effect of base rate increases in 2004 would continue to flow through the lending books and would be reflected in B&B’s and industry figures, he added.
Meanwhile, the lender announced on Monday that it had purchased a mortgage loan portfolio from GMAC-RFC for around £251 million. The acquisition is the first purchase resulting from an agreement announced in January 2005 to acquire up to £1.4bn of loans during 2005 from GMAC-RFC.
The acquisition, funded from existing resources, has been made by its subsidiary Mortgage Express.B&B says the loan portfolio acquisition will increase the Group’s total managed assets, which stood at £38.2 billion on 31st December 2004, by around 0.7%.
The lending in the portfolio was secured on UK residential property and has a similar credit risk profile to previous portfolio acquisitions. The acquired mortgages are, by value, approximately 21% buy-to-let, 44% self-certified with the remainder standard mortgages. The book has an average loan size of approximately £131,000 and an average loan to value of approximately 72%.IFAonline
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