Skipton Building Society is increasing selected rates across its fixed rate product ranges, effective from Tuesday 26 March.
This news is meant for brokers. If you are a consumer visit personalfinanceandsavings.com.
The increases will be seen across the society’s 2-year fixed rate purchase only residential range, along with its 2-year and 5-year residential remortgage offering.
Newspage asked brokers for their reaction to this, particularly after yesterday’s hold and dovish Bank of England comments, and inflation falling to 3.4% this week.
Their views are below.
Hannah Bashford, director at Model Financial Solutions:
“This is just baffling. With a positive base rate decision meeting yesterday and expectations for rates to decrease by the summer, we’ve seen swaps reduce and yet lenders are increasing their rates.
“Why? They can’t all be claiming to stem business volumes when March has been much slower in terms of applications than January and February.”
Matthew Jackson, director at Mint FS:
“You would hope that this move is purely service-related, namely Skipton needing to slow down applications to keep service levels high.
“After a more positive week than expected in terms of inflation and the dovish comments from Andrew Bailey, most were expecting positive reactions and cuts from lenders.
“Against this backdrop, these increases could smack a little of profiteering before the almost certain cuts to the base rate.”
Stephen Perkins, managing director at Yellow Brick Mortgages:
“Skipton have either made these rate decisions in a dark room isolated from the news cycle, or are trying to increase their margins or reduce their application levels.
“I am sure they will achieve the latter with these rate increases whilst SONIA swap rates are reducing and inflation is falling.”
Gareth Davies, director at South Coast Mortgage Services:
“Inflation is improving, gilts are improving, swaps are improving and the chances of rate cuts are improving.
“And yet lenders hike their rates. Where’s the logic?”
Robert Timm, managing director at Sunland Mortgages:
“One word: why? With the positive news on inflation this week, Andrew Bailey suggesting rate cuts are in play and swap rates falling, what justification can a lender have to increase rates?”
Darryl Dhoffer, adviser at The Mortgage Expert:
“With borrowers on their knees, inflation falling further than expected, swap rates down and dovish comments emerging from Threadneedle Street, this move makes zero sense.
“It’s another hammer blow for borrowers, and is bordering on profiteering.”
Justin Moy, managing director at EHF Mortgages:
“This is a disappointing reaction to the positive news from the Bank of England yesterday.
“As we enter arguably the most important period in the year to sell a property, this will only push away first-time buyers and quieten the market further.”
Gary Bush, financial adviser at MortgageShop.com:
“Skipton defies logic by increasing its mortgage rates after two pieces of amazing news this week: lower-than-expected UK inflation data and the Bank of England pausing a rate increase again.
“They are yet another lender going in the wrong direction down a one-way street – a decrease is the expectation dear lenders – please pay attention.”
Michelle Lawson, director at Lawson Financial:
“A surprising Spring bounce upwards for the Skipton after a hold on the base rate yesterday and swap rates coming down. Hopefully this is the rise before the fall.”
Rohit Kohli, director at The Mortgage Stop:
“What a disappointing annoucement from Skipton, especially after the positive signs from the Bank of England that they are gearing towards reducing rates.
“With markets reacting positively to this week’s data, we’re left scratching our heads as to what lenders are doing by increasing rates?
“With big profits already announced by many big lenders, surely they can’t just be wanting more before the reductions start happening?”
Jack Tutton, director at SJ Mortgages:
“I hope this increase is the beginning of the end of rate rises.
“The market has reacted well to both the inflation and base rate news this week, with lending rates falling consistently since Wednesday.
“Providing this continues, expect to see reductions in rates shortly.”
Mark Robinson, managing director at Albion Forest Mortgages:
“Skipton astound everyone by increasing rates despite the base rate holding (again) and inflation reducing more than expected.
“This could be a response to swap rates, which tend to be behind the curve, or may just be that Skipton have been too busy lately and want to give their underwriters a breather.
“Either way, we need to start seeing a slow reduction in mortgage rates to encourage the market.
“It doesn’t help that the Government announced zero worthwhile support for the housing industry during the Spring Budget.”
