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Sandman
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Sandman
Pundit
Joined: 06 Oct 2003
Posts: 417
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 Posted: Thu Jan 21, 2010 5:39 am Post subject: |
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Just had a look on the Skipton website. No details of this decision that I can find. Maybe the Telegraph is making the story up. After all on the home page Skipton state | Quote: | | At Skipton Building Society, we know every penny matters, whether it's mortgages, savings, investments or insurance. We provide friendly face to face advice and with deals appearing in best buy tables every week you’ll feel at home with the UK's Best Regional Mortgage Lender. |
So Skipton know that every penny is important so thay would hardly hit their members with a £2000 hike would they? |
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fanny
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Joined: 26 Jun 2003
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| Posted: Thu Jan 21, 2010 10:52 am Post subject: |
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| It's on the Home Page at the bottom right just below the Surf Board. |
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HB
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Joined: 20 Apr 2000
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Location: Yr Hen Wlad
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| Posted: Thu Jan 21, 2010 11:20 am Post subject: |
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For the benefit of Sandman and others, here's the link
| Telegraph article wrote: | | The savings market is so competitive that societies have seen a net withdrawal of deposits for each of the past 11 months. |
Provide rates that are attractive then.
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Sterling Forever. |
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Sandman
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| Posted: Thu Jan 21, 2010 12:21 pm Post subject: |
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| Ouch,surely Skipton mortgage members will be switching to more competitive providers? |
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HB
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| Posted: Thu Jan 21, 2010 12:53 pm Post subject: |
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You would think/hope so. Especially since Skipton have written to their customers and alerted them to the fact.
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Sterling Forever. |
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Sandman
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| Posted: Thu Jan 21, 2010 3:05 pm Post subject: |
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| How much can rates go up before double dip recesion hits. On the flip side those of us with investments can start to look forward to some income. |
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Ord
Adept
Joined: 23 Dec 2000
Posts: 3546
Location: London
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| Posted: Thu Jan 21, 2010 8:25 pm Post subject: |
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Meanwhile Nationwide sticks to its more expensive mortgage promise at the expense of the average member.
I read today that they estimated that it took £450m off its bottom line in 2008/9 
re Skipton - Are the member owned businesses perhaps not set to pull their weight in 2009/10? There is always that additional part of the equation at Skippy. |
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longboard
Worthy
Joined: 18 Apr 2001
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Location: Hawker's hut
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angst
Mastermind
Joined: 30 Sep 2004
Posts: 4398
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| Posted: Fri Jan 22, 2010 12:07 am Post subject: |
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| It just goes to show that ultra low interest rates rip the system apart just as much as ultra high rates. The BoE is peddling a lie that upward inflationary pressure is a very short term problem.We need to start along the path now of easing rates up to a more normalised level.Those who have debt they cannot sustain without a lottery win will eventually have to pay the price, it's just a mathmatical certainty. |
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rufushunt
Adept
Joined: 01 Apr 2003
Posts: 185
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| Posted: Sat Jan 23, 2010 12:25 am Post subject: |
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Similar story in yesterdays Standard
http://www.thisislondon.co.uk/money/article-23798075-skipton-hikes-standard-variable-mortgage-rate.do
In tonights edition (sorry no link) more background :
societies simply not designed for a world of low interest rates ......recent mergers at prodding of regulators ..... nationwide has already done all the rescues it can stomach .....britannia and co-op preoccupied ditto chelsea and yorkshire...... skipton first to take drastic action by overturning earlier mortgage deals to increase rate and give itself more headroom ... other societies watching in embarrassed silence, but odds are more will follow ... a lot of customers who have enjoyed ultralow rates will have to get used to living without them.
Doesn't bode well !
Other pages - China boom to bust, why is UK selling world beaters (Cadbury's) and exodus from City  I'll just get my tin hat. |
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MarkyMarkD
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| Posted: Sat Jan 23, 2010 12:42 am Post subject: |
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This is almost definitely NOT the beginning of a wider trend, as the Standard seems to think.
The point is (as I understand it) Skipton's mortgage terms as specified in their KFIs said that the cap on SVR (restricting it to BBR+3%) would not apply in exceptional circumstances.
That is not "ripping up the original deal" as has been stated. That is applying the original deal exactly as documented. If anyone thinks that a situation where BBR is 0.5% and the average fixed rate bond rate is several percent above swap rates is not exceptional, they don't know what they are talking about.
HB's "provide some rates which are attractive then" is stupid. How can a provider pay attractive savings rates when its HIGHEST mortgage rate is 3.5% and it is making less than that on any discounted mortgages, trackers or fixed rates.
As for Ord's "Nationwide sticks to its more expensive promise" I think that's because it wasn't hedged as being "not in exceptional circumstances".
You can bet your bottom dollar that (a) Skipton got FSA approval up-front for this change, and hence nobody's going to successfully challenge it and (b) Nationwide can't do the same because it would breach the terms of their customers' deals.
The FSA has had ample time to choose to give an industry-wide waiver on TCF principles for ludicrously low tracker rates, and hasn't done so. Even if it could apply such a waiver, I can't see why such action by lenders would succeed in contract law. Whereas, conversely, I cannot see anyone successfully claiming that there are not the exceptional circumstances required to trigger the Skipton clause.
Skipton's website states: | Quote: | | If your mortgage documentation states that the SVR ceiling applies then it also clearly states that, in exceptional circumstances, the Society can remove the ceiling by giving you not less than 30 days' notice of our intention to do so. |
Regarding Sandman's "surely Skipton mortgage members will be switching to more competitive providers?" 4.95% is still a very competitive SVR. Show me someone else offering a 4.95% rate with no up-front costs and no ERCs? |
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rufushunt
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HB
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Joined: 20 Apr 2000
Posts: 5444
Location: Yr Hen Wlad
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| Posted: Sat Jan 23, 2010 12:56 pm Post subject: |
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| MarkyMarkD wrote: | | HB's "provide some rates which are attractive then" is stupid. How can a provider pay attractive savings rates when its HIGHEST mortgage rate is 3.5% and it is making less than that on any discounted mortgages, trackers or fixed rates. |
Rubbish.
It will also have a good number who have fixed mortgages at rates way above the current rate. And there will always be loads of savers money in societies at rates below 1%.
If a society needs funds it must attract them at good rates. My point stands.
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Ord
Adept
Joined: 23 Dec 2000
Posts: 3546
Location: London
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| Posted: Sat Jan 23, 2010 1:15 pm Post subject: |
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The opposite also applies.
Until December I & the rest of my family had a very large sum at 6.5% in the Skipton fixed rate ISA.
I & the rest of my family still have a very large sum at 7.0% in Skippie FR bonds.
Presumably they bought interest rate swaps to limit the damage to other members of falling interest rates?
Today's Times Business makes the point that there is no evidence of Skipton directors sharing the mortgage members' pain,
We await the 2009 accounts with interest to see if mutuality cuts both ways or just cuts the members  |
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