Richard Banks of UK Asset Resolution is the man in charge of running down the books of bailed-out Northern Rock and Bradford & Bingley.  He is cautioning upwards of 60,000 of its mortgage clients if the Central Bank is to up interest rates.  The possibility of these customers to quickly go into arrears is a real concern if the rates were to rise above the rock-bottom rate of 0.5% which has been the rate for years.

Thousands of the customers of Northern Rock and B&B were able to take their mortgages and remortgage with other firms, but many still remain.  There is still a hefty £38.3bn outstanding on the books, although more than £10.4bn has been paid out since 2010.

Banks has noted that less than 10% of the more than 520,000 mortgage holders are currently up to date with monthly payments, but how that could quickly go south if the interest rates increased just slightly.

Banks commented on the slight increase and how much impact it could have, saying: "If interest rates rose by 1% then a further 22,000 customers, around 7% of the customer base, might struggle or go to into arrears.

"You could probably multiply that by three if interest rates went to 3%. It is a very real concern to us that interest rates rise rapidly and significantly. The Bank of England in its signalling has made it clear that interest rates will rise gradually rather than dramatically and suddenly."

Banks continued: "We know the customers who've definitely got problems because they're in arrears. The trick is trying to work out which customers may be in problems when interest rates rise. We are starting a programme of contacting customers we think may be most at risk."