Lender silent on mortgage redemptions

The UK's fourth biggest building society came under fire in January after revealing plans to raise its standard variable rate from 3.5 to 4.95 per cent, despite a guarantee to lenders.

The mutual blamed "exceptional market conditions" for its decision and gave customers 90 days to redeem their mortgages free of charge.

But when the deadline passed yesterday, the building society refused to disclose how many mortgage holders had actually chosen to do this.

A spokeswoman said: "It would be inappropriate to disclose commercially sensitive data regarding our mortgage portfolio. People redeem for a variety of reasons. However, activity is in line with expectations."

Some 29,000 borrowers were affected when the new rate came into effect on March 1. A further 35,000 borrowers are due to revert to the standard variable rate in the future.

Despite the Bank of England base rate standing at just 0.5 per cent, Skipton scrapped a guarantee to borrowers on the standard rate that they would never have to pay more than three per cent above the base rate.

London law firm Leon Kay Solicitors is investigating whether there is a legal case against the mutual after more than 100 customers contacted the firm.