Yorkshire firms should not fear interest rate rises

ECONOMIC experts and entrepreneurs believe that an inevitable rise in interest rates will not hurt the recovering property market and wider business confidence in Yorkshire.
Speaking at a breakfast seminar hosted by Investec Wealth Management and TheBusinessDesk.com in Leeds, a panel of experts agreed that a steady rise in interest rates starting in 2015 is the right approach in terms of balancing the economic recovery and dealing with inflation.
The panel for the event at the Doubletree Hilton Hotel, included Darren Stubbs, managing director of Leeds-based housebuilder Stonebridge Homes.
The company, formed in a joint venture with quoted South Yorkshire-based developer Henry Boot, also operates a growing serviced office arm and will achieve turnover of £10m this year.
Mr Stubbs said that housebuilders expected interest rate rises from next year but said that the bigger challenge they face is restrictive planning rules that prevent enough new homes being built to meet the growing demand.
“With the new rules on mortgage lending we are also having to work closely with our customers to make sure they can secure the funding to buy a home.”
John Haymes, head of research at Investec Wealth Management, said that all businesses were operating in a much better environment now, after the long recession.
He said he expects interest rates to rise at a “steady” rate of around 0.25% a quarter in 2015.
Wayne Bowser, the former regional director for the north of England and deputy head of commercial banking with international banking group HSBC was also on the panel.
Mr Bowser is now a non-executive director with Yorkshire-based Beal Homes, Harratts Motor Group and Endless, the UK private equity house.
He said all of the firms he is working with are experiencing improving markets and opportunities and said that a gradual increase in interest rates would not hit them negatively.
His words were backed up by fellow panellist Simon Quin of Lloyds Banking Group who works in both the property sector and with SMEs across the North and East of England.
He said that businesses were all focused on growth plans and the demand for bank lending was increasing for companies looking to put those plans into place.

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