Dear Member,
Since our announcement on 21 January regarding the decision to increase our Standard Variable Rate (SVR), we have been actively listening to the customer response and are aware of media coverage both in the papers and online.
I wanted to respond to some of the themes emerging by clarifying a few points:
Skipton is a financially strong business
The Skipton Building Society Group is profitable and well capitalised. At this time of year, Stock Exchange rules prevent us from publishing details, but when our annual results are published at the end of February, they will show that our capital and profits increased in 2009 compared to 2008. However, this is largely due to the strong performance of our trading subsidiaries. It is important that the savings and loans business of the Society remains robust, hence our decision to increase SVR. This is a pragmatic decision taken in the long term best interest of the Society and its members as a whole.
We are responding to pressures inflicted by the exceptional economic circumstances
Bank Base Rate has never fallen below 2% in the 315 year history of the Bank of England – until 2009, when it fell to 0.5%. The cost of retail funding relative to Base Rate is exceptional. The high cost of funding and competition for savings balances – unfairly dominated by some government-backed banks – makes it more difficult to balance the needs of all our members. Therefore we decided to exercise our right to remove the ceiling in order to do this.
Our members can still trust Skipton to act fairly
Our right to remove the SVR ceiling is clearly shown in our mortgage offers, on the same page and in equal prominence as when the borrower first became aware of the existence of the SVR ceiling. It was not advertised nor used as an inducement.
Once exceptional circumstances no longer prevail, you can rest assured that the ceiling will be voluntarily reintroduced. We have launched a new page on this website that allows anyone to track the circumstances until this happens and have the reassurance that we will write to all our affected borrowers to let them know when that time comes.
If you wish to email me about this subject, please get in touch.
As you may be aware, Skipton Building Society increased its mortgage Standard Variable Rate (SVR) with effect from 1 March 2010.
We have written to all our borrowers to explain if, and how, their mortgage is affected.
If you are a Skipton borrower, we would encourage you to read your letter carefully as it contains detailed information that should help to answer any questions you may have.
If you are affected by the changes, these pages will help you find more information about the SVR increase and provide useful forms to request a redemption statement or make changes to your mortgage, and gives you a choice of ways to contact us if you want to.
Exceptional Circumstances
Useful Forms and Information