Mortgage News Thursday, 28th January 2010

Compared with November, to £13.7bn.The Council of Mortgage Lenders (CML) said UK mortgage lending increased by 14% in December.
However Skipton Building Society reported that thousands of its customers would see a hike in their mortgage bill, with its standard variable rate rising from 3.5% to 4.95% on 1 March. As it removes the ceiling on the standard variable rate (SVR) that guaranteed the rate would be no more than 3% above the Bank rate - which is currently at a record low of 0.5%.
Skipton - the fourth largest building society in the UK - said that it was enacting the clause in contracts which allowed it to remove the ceiling "in exceptional circumstances". Some 29,000 Skipton customers will see rates rise in March, with another 35,000 on deals that will revert to the SVR in future months. Relatively few lenders have similar ceiling promises in place for existing borrowers.

The customers affected will receive a letter from the lender, explaining the decision. They will have a 90-day window to sign up for other Skipton fixed rate or tracker deals without having to pay the normal fee, although none of these rates are as attractive as the SVR.

The latest figures from the CML show that UK mortgage lending was up 3% in December compared with the same month a year earlier.
CML economist Paul Samter said that the December lending figure was "surprisingly strong" as seasonal factors usually meant a slowdown compared with November. "Evidence suggests that the rise was driven by a surge in house purchase completions," he said."The most likely explanation is that buyers of cheaper property wanted to complete their transactions before the end of the year to beat the end of the stamp duty holiday."