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PUBLIC PAYING THE RENT; CITY DESK; EXCLUSIVE.

Byline: Edited by GRAHAM HISCOTT

The taxpayer is subsidising a rental boom for nearly 100,000 private landlords.

The windfall dates back to the Government bailout of the crippled Bradford & Bingley.

While the savings and branch arm was sold, the "bad" bit - its mortgage division - was nationalised.

It currently includes just under 96,000 buy-to-let landlords, with around 172,500 mortgages between them, who are currently paying just 2.25% interest - around half the industry average - thanks to a rate deal.

At the same time those landlords are quids in thanks to a surge in rents.

Richard Banks, chief executive of UKAR, the body overseeing the B&B business, admitted: "They would be mad to redeem their mortgage." He added: "If you were a commercial organisation it may be different, but we are funded by the Government."

UKAR, which also looks after the "bad" bit of Northern Rock, wants borrowers to switch provider in order to pay back the taxpayer.

Another PS1.7billion was repaid in the three months to the end of September, but the taxpayer is still PS40bn out of pocket.

UKAR said a "significant number" of borrowers were struggling to meet repayments, despite a drop in arrears, record low rates and extra help.

Banks warned that up to 30% of customers would be plunged into crisis if rates soared to 5% soon.

That's very unlikely, but an improving economy has fuelled speculation of an earlier-than-expected Bank of England rate rise.
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Title Annotation:Business; Opinion, Columns
Publication:The Mirror (London, England)
Date:Nov 15, 2013
Words:243
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