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Skipton Bs Lowers Btl Rates By 0.5%

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Smacks a bit of desperation by Skipton. Diminishing pool of BTL borrowers so they're competing for them by cutting their margins to the bone.

This

It is in their nature. One trick pony

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More HPI in the pipe line.

more boomers buying ip parts of northen towns at ridiculous prices.

Hammon and Dis-May are not going to roll back the damage Osborne and Cameron have done...they're going to make it much worse by the looks of things.

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As per the Skipton website, Moody's (Baa2) and Fitch (A-) both think that Skipton are only one small misadventure from losing their investment grade credit rating.

I doubt it would take a misadvantage. The passage of time will be enough....

Edited by eek

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As per the Skipton website, Moody's (Baa2) and Fitch (A-) both think that Skipton are only one small misadventure from losing their investment grade credit rating.

I've had a few aquaintences, social or professional, who worked in various everyday white collar (IT, operations, business analysis) roles in the small to medium lenders in West Yorkshire - YBS, B&B, LBS, Skipton - individually and collectively they have always been hpi bulls, right to the bitter end, wth their own family breakdowns on the alter of property ownership, as well as institutional in the case of B&B or all of them in the case of government bailouts. I suspect that they believe B&B, NR implemented a good business model badly rather than there being anything intrinsically wrong with forever zirp. Edited by Si1

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In the half-year to 30 June 2016, for every £2 profit after tax that they made in the lending game, they made £1 in the estate agency game.

Skipton%2Bgroup%2Bprofits%2B2016%2BHY.pn

Source: Skipton 2016 HY financial report

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The strength of the Society is further enhanced through its estate agency operations, Connells, that operates under a number of different brands including Connells, William H Brown, Barnard Marcus, Sharman Quinney and Peter Alan. In 2015, Connells acquired Gascoigne Halman estate agents and made a number of other small acquisitions of estate agency or letting businesses. Connells reported strong profits from the sale of houses, lettings, surveys and valuations and mortgage services and we believe it is well positioned to continue generating strong profits that support the Society.

Source: Skipton 2015 annual report, emphasis added.

Edited by Bland Unsight

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No 120% mortgages here lads, but they are lending 100% more than a house is worth.

What can possibly go wrong.

Haha - yep. In my own definition of value/worth, if someone is taking a 90% mortgage in parts of the SE, the mortgage is 360% of the value of the home!

(320k house that's really 'worth' around 80k, 32k deposit, 288k loan).

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Our strategic objectives are to grow our mortgage and savings business, provide high quality financial advice, and maintain a significant presence in estate agency through the Connells group, in order to generate profits that can be used to strengthen the Society’s capital position for the benefit of members.

Source: Skipton, 2016 HY financial report

"Capital position". The society is a legal entity and it has its own money. When it lends, it lend this money and money it has borrowed from its members (i.e. customer deposits) and the Skipton also borrows a little from other sources.

If lender's capital position is weak it means that if lots of its loans sour, the society's ability to cover losses with its own money is fairly limited and serious losses would impair its ability to give depositors their money back, should they want it back.

I love the idea that a mutual has lent adventurously enough that they feel, as they say themselves, that it might be wise to "strengthen" their capital position.

Given that almost all the money that they've lent is lent against residential property it's quite amusing that the game plan to sort things out is to get into the estate agency game.

I guess this means you could be someone who wanted to own a home but had a BTL investor armed with a Skipton mortgage outbid you for the house. If you then ended up renting that same house you might have ended up paying out hundreds of pounds of fees to a Skipton group letting agent.

71126160.jpg

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Wow, didn't know they owned EAs. Interesting - guess if they help keep lending going that keeps transactions up for their EA operation!

The mutuals have made a lot of 'compromises' on their founding principles since the mortgage market was opened up to all and sundry (including the clearing banks) back in the 1980s. If you're an executive at a mutual I am sure these compromises make perfect sense. For an outsider looking to get a house for less than a kidney and the soul of your first born, these compromises are perhaps a bit more problematic

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Deals include a two-year fixed rate at 1.89 per cent to 60 per cent LTV and a five-year fix at 2.99 per cent up to 70 per cent, both with £1,995 fees.

That's one juicy fee. Can I put it on my credit card?

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Wow, didn't know they owned EAs. Interesting - guess if they help keep lending going that keeps transactions up for their EA operation!

A lot of the banks/finance companies own chains of EAs.

Should be illegal.

No one buying should use them.

The UK is the most corrupt place on earth AFAIKS

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£1,995 fee for a 2year fix.

Does the BTL'r just roll that into the loan every 2 years? I need to do some capital repayment sums. Or are they Interest only?

Edited by Ash4781

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I know they owned EAs but I didnt realise it was so many.

Talking about a conflict of interest.

Salvador Dali imagined a Tower of Babel being constructed from the top down with labourers on each floor extracting nourishment from the defecations of the floor above.

He could equally have been describing the UK economy.

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£1,995 fee for a 2year fix.

Does the BTL'r just roll that into the loan every 2 years? I need to do some capital repayment sums. Or are they Interest only?

Last time I saw legit numbers, about 80% of BTL is on interest-only terms. Every time I've checked on these 'deals' the option to capitalise the fee (i.e. roll it into the loan as you suggest) exists.

I've never seen any numbers on what proportion of BTL borrowers capitalise fees in this way, but neither have I looked very hard or very often.

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£1,995 fee for a 2year fix.

Does the BTL'r just roll that into the loan every 2 years? I need to do some capital repayment sums. Or are they Interest only?

Worth bearing in mind volumes of BTL remortgaging are usually comparable to or greater than the volumes of new loans for purchase. BTL is festival of fees for the lenders and this move to a treadmill of 2 year fixes must be generating a lot of income.

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