Brokers slam Skipton SVR move
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Advisers have hit out at Skipton Building Society’s move to axe the ceiling on its standard variable rate, hiking it from 3.5 per cent to 4.95 per cent.
Money Marketing first revealed that Skipton was to temporarily remove its ceiling, which meant that customers would never pay more than 3 per cent over the base rate.
The lender blamed “exceptional circumstances” for the move and said it plans to reintroduce the ceiling rate once market conditions improve.
Burwood Financial Consultants managing director Peter Suttill says: “I think it sends out a worrying sign to the market. Lenders reneging on deals is a worrying trend.
“It is a matter of confidence. We are trying to restore confidence in the market, and if lenders start doing these sorts of things it inhibits that rebuilding of confidence.”
London & Country technical manager Richard Morea says: “The 1.45 per cent rise is a massive blow to Skipton borrowers linked to SVR, and the timing couldn’t be worse as the latest figures show a larger than expected rise in inflation, stretching finances even further.”
Skipton group chief executive David Cutter says: “While we understand this change will be unwelcome for those borrowers who will end up paying more as a result, we hope that they will understand it is a necessary step that is in the best interests of our membership as a whole, and indeed the society itself, in the long run.”
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Readers' comments (24)
Steve | 21 Jan 2010 1:32 pm
I'm pleased this has happened. How on earth are Building Societies to make money when they are charging such artificially low rates? Also, it should encourage House Prices to reach their equilibrium level.
Well done Skipton!
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Anonymous | 21 Jan 2010 1:39 pm
This move has come at a time when the industry needs stability to rebuild confidence with the borrowers, especially with the announcement of the larger than expected growth in inflation.
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Anonymous | 21 Jan 2010 1:40 pm
I take it the above comment was from someone at Skipton.
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Stuart | 21 Jan 2010 1:41 pm
How can this be Treating Customers Fairly?
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Anonymous | 21 Jan 2010 1:47 pm
I wonder if borrowers could use the same 'exceptional circumstances' to suddenly decrease their repayments. Of course not. Another example of lenders making up the rules as they go along. Shame on you Skipton.
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Anonymous | 21 Jan 2010 1:50 pm
I believe that the Skipton has done the right thing and I do not represent or work for any lender. House prices are far too high and need to rebalance. Remove artifical stimulus and cheap borrowing and the resiult on house prices is inevitable - let's get on with it! Bring it on!!
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Anonymous | 21 Jan 2010 1:54 pm
Do any members of the public actually look at the clauses in their mortgage contract, or indeed, do any mortgage brokers explain to their clients the 'what if's'? Nope....they don't....
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Anonymous | 21 Jan 2010 1:56 pm
Rates go up Skipton win, rates go down Skipton win. By reneging on an agreement David Cutter should hold his head in shame. TCF what an absolute hoot.
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Just an IFA | 21 Jan 2010 2:01 pm
Don't worry, whilst a lot of people will be very angry with this news, in a few weeks time it will be old news paving the way for other lenders to do the same. The FSA's view is that the banks can put interest rates up, dual price, cross sell and generally do everything in their means to shaft both the financial adviser and the client. I wonder if the FSA would take the same view if an IFA would adopt that same attitude?!!
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David Hughes | 21 Jan 2010 2:02 pm
I would imagine that anyone with a SVR or Discounted mortgage with the Skipton will be looking to remortgage elsewhere. They could well have shot themselves in the proverbial foot!
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