Skipton’s SVR clause to be challenged

An investigation into the legality of a clause in Skipton Building Society’s mortgage contract that allowed the lender to hike its SVR to 4.95%, has been instigated by a law firm.

The same firm had previously set up action groups against Bradford & Bingley and the Royal Bank of Scotland.

Last month the Skipton revealed that it was temporarily removing the ceiling on its SVR which promised borrowers that their revert rate would not go over 3% above the Bank of England base rate.

With effect from March 1 the building society is bringing in a new SVR at 4.95%, which the building society says is in response to “exceptional market conditions.

It is believed that clauses such as these are in breach of the Unfair Contract Terms Act 1977.

The firm says that Skipton’s decision forces borrowers to pay early repayment charges, and pushes up mortgage payments for those borrowers who cannot remortgage.

If it is found to be unlawful it could open the floodgates for Skipton’s mortgage borrowers to bring claims against them.

If you are a Skipton borrower and are affected by the SVR decision you should contact Gravitas Law who may be able to help.

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Tags: investigation, skipton building society, svr

This entry was posted on Friday, February 19th, 2010 at 9:40 am and is filed under Why were mortgages mis sold?. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.