Skipton BS: Their broken promise of not raising SVR above 3.5%

jdw2000

Hello Experts,

I have a BTL with Skipton. Recently, I came off a 3-year fixed-rate. I am now on an SVR of 4.95%.

However, you may be aware that Skipton had previously GUARANTEED to not put us more than "3% above the BoE base rate".

I read on the internet that action might be taken. Is this something anyone here knows about? Can I ask Skipton to honour their promise? Does anyone here have any advise?




This is the article taken from the Daily Mail (I am not allowed to post a link, but it's easily found on google):



"Skipton risks action over broken promise

By Jeff Prestridge, Mail on Sunday Personal Finance Editor
Last updated at 10:05 PM on 20th March 2010


Skipton Building Society's decision to renege on a guarantee given to 64,000 mortgage borrowers could yet come back to haunt it.

London law firm Leon Kaye confirmed last week that after seeking legal counsel it believed that Skipton customers affected by the lender's controversial move may have a potential claim under the Unfair Terms in Consumer Contracts Regulations.

It said it had sent a 'letter before action' to Skipton, but had yet to receive a response. A class action against the society in the High Court is a possibility. It has also taken up the issue with the Financial Services Authority and the Office of Fair Trading.


The interest rate guarantee given by Skipton promised that once borrowers came off a special mortgage deal (fixed or discounted), their revert-to rate would never be more than three percentage points above base rate.
The word 'guarantee' was used in mortgage offers twice. It was a reassuring guarantee, given that most revert-to interest rates - often referred to as standard variable rates or SVRs - are at the whim of lenders.

In recent months, a string of lenders, primarily small building societies, have raised SVRs in an attempt to increase their profit margins. They include mutuals Marsden and Mansfield.
But earlier this year, after denying that he was going to tear up this rate guarantee, Skipton boss David Cutter did just that. It means the revert-to rate is 4.45 percentage points above the base rate and many Skipton borrowers now have higher bills. Monthly payments for a borrower with a 25-year repayment mortgage have risen from £751 to £872.

Skipton is one of only a few lenders to have offered such a rate guarantee. Nationwide has a similar deal, but rather than renege on it decided to withdraw it for new borrowers only.

On Friday, Skipton confirmed that it had received correspondence from Leon Kaye, which it was addressing with support from its legal advisers."

VIGILANT22

You might feel more at home on this thread

http://forums.moneysavingexpert.com/showthread.html?t=2218447&highlight=skipton&page=20

jdw2000

thanks, V. I have moved to the other thread.