01 September 2016

Barclays first bank to scrap LOBO loans

Barclays has become the first bank to scrap high interest Lender Option, Borrower Option (LOBO) loans for councils.

The move will see more than 100 LOBO loans - thought to be worth around £8bn - converted into fixed-rate loans.

A spokesperson for Barclays said: ‘Under the changes Barclays is permanently waiving its 'lender option' to amend the interest rate at given periods. This will create certainty for the client for the duration of the loan, by locking in the fixed rate for its lifetime.’

Overall, around 240 local authorities have taken up to £15bn in LOBO loans from private banks, which charge interest rates of more than 7% in some cases.

To date, residents from 24 different local authorities have mounted legal objections to their use, claiming the loans are ‘irrational’ expenditure and therefore unlawful.

The spokesperson added: ‘Over a hundred local authorities and housing associations will benefit from greater certainty that their borrowing costs will not rise in future. They will also enjoy reduced break costs than there would have been had Barclays retained its right to change the interest rate. The original value they secured when taking out the loan at rates lower than those available publicly at the time, is now locked in for the lifetime of the loan.’

SIGN UP
For your free daily news bulletin
Highways jobs

Makaton Tutor - Part Time / Term Time

Essex County Council
£25821.00 - £30377.00 per annum + + Pension
Makaton Tutor - Part Time / Term TimePermanent, Part Time£30,377 per annum, full time equivalent / equal to £15.74 per hour.Location
Recuriter: Essex County Council

Assistant Urban Design Intern

Essex County Council
Up to £25081.00 per annum + + 26 Days Leave & Local Gov Pension
Assistant Urban Design InternFixed Term, Full Time£25,081 per annumLocation
Recuriter: Essex County Council

Wellbeing and Independence Practitioner - Safeguarding Team

Essex County Council
£31931.00 - £36423.00 per annum + + 26 Days Leave & Local Gov Pension
Wellbeing and Independence Practitioner - ASC Centralised Safeguarding TeamFixed Term, Full Time£31,931 to £36,423 per annumLocation
Recuriter: Essex County Council

Financial Strategy Manager (Revenue)

The Royal Borough of Kensington & Chelsea Council
Negotiable
Bring clarity to complex decisions and help shape how we invest in our borough's future.Bring clarity to complex decisions and help shape how we inves England, London
Recuriter: The Royal Borough of Kensington & Chelsea Council

Team Manager - Locality

Wakefield Council
£55,979.00, Grade 13
Wakefield Children’s Services have been rated by Ofsted as GOOD with outstanding leadership. Wakefield, West Yorkshire
Recuriter: Wakefield Council
Linkedin Banner