Skipton’s decision to withdraw from its “guarantee” standard variable rate promise has resulted in a letter before action suggesting a potential class action.
Many lenders are facing the daunting prospect of having borrowed money on short term arrangements and then on lent long term mortgages at fixed rates or with future promises within their contracts about rates that the funding market price is now substantially higher than they ever expected.
Skipton Building Society entered into contacts with an estimated 64000 borrowers such that their mortgages would never exceed base rates plus 3%. Many of these mortgages were discounted or fixed rate mortgages for between 1 year and 5 years reverting to standard variable rates. Within these contracts the Skipton Building Society referred to this as a guarantee but with an ability to avoid this obligation under “exceptional circumstances”.
Leon Kaye the well known Class Action lawyer has issued a news item saying that it has sent a letter before action to Skipton Building Society for 4 test cases pending a potential class action last week on behalf of a wider group of mortgage borrowers. It claims to have taken Counsels opinion and is seeking redress under the Unfair Terms in Consumer Contract Regulations 1999.
Neither Leon Kaye or Skipton Building Society have yet responded to our request for comment.
