Simon Jones, Director at Savills Private Finance, commented:
‘Most lenders have announced revised SVRs with effect from 1st March and what we are seeing is a continued widening of profit margins. Those borrowers that took discounts that were linked to SVRs have in some cases seen their mortgage payments rise by more than the Bank of England’s Base Rate increase that was announced in February. We would like to see a fairer and more transparent attitude to product pricing with a clearer link to Bank Base.
Example:
On 01 December 2001 when Bank Base stood at 4%, an average SVR was 5.75%. Today, Bank Base stands again at 4% and an average SVR is 5.95%. The margin has therefore widened by 0.20% and if we assume that 20% of borrowers are on SVRs, this represents an additional £300m in revenue for the banks and building societies
