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Skipton increases rates: "a disappointing reaction to the positive news from the Bank of England yesterday"

ended 22. March 2024

Skipton Building Society has just announced it is increasing selected rates (see screengrab, below). Newspage asked brokers why this might be after yesterday's hold and dovish Bank of England comments, and inflation falling to 3.4% this week. Their views are below.

12 responses from the Newspage community

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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.
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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.
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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.
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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?
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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?
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Darryl Dhoffer
Founder at The Mortgage Geezer
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.
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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.
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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?
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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.
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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.
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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.
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Gary Bush
Financial Adviser at MortgageShop.com
Skipton defies logic by increasing its mortgage rates after 2 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.