The move last week by the Skipton last week to raise it's standard variable rate (SVR) on mortgages from 3.5% to 4.95% for new borrowers is a worrying precedent and shows how much pressure many building societies accounts are under. Building societies that lend their savers funds are struggling to draw in adequate savings as low interest rates and aggressive saving schemes from nationalised banks threaten their traditonal saving base.
The move by Skipton has been matched this week by specialist buy-to-let lenders such as the Nationwide who announced plans to raise SVR across their specialist lending divisions including the Mortgage Works which is now one of the largest buy-to-let lenders.
Thousands of landlords will see their SVR jump by up to 0.3% from February 1st adding to the cost of their buy-to-let loans.
A spokesperson for Nationwide, which is the UK's biggest building society, said:
“Particularly in the specialist marketplace, the rates for specialist products tend to be higher than prime, and there has been more movement in that area.
“It is a symptom of the market that we are having to review these rates. Other lenders have also done this and we feel this is an appropriate action to take.”
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