Analysis by moneysupermarket.com has revealed a deafening silence in the mortgage world, as 30 of the UK’s mortgage lenders have yet to inform their customers whether they will be passing on last month’s surprise base rate cut and by how much. Among those who have passed on the cut, 34 have not passed on the full benefit, with cuts of just 0.3, and in some cases, 0.1 per cent the norm.
Louise Cuming, head of mortgages at moneysupermarket.com, said: "Our data clearly shows that some lenders feel that by keeping their heads down and saying nothing, their SVR customers won’t notice they are shelling out more than they need to on their monthly repayments. This kind of attitude does nothing to rebuild consumer confidence in an area that is already suffering from reports of less than helpful practices among some lenders, including charging for debt advice for customers who run into trouble and being a little on the heavy-handed side when it comes to arrears and repossessions.
"Lenders will undoubtedly argue that base rate has little to do with the rates they set their customers and that may be true when it comes to fixes and trackers, but an SVR deal is generally linked to decisions taken by the MPC. Thanks to the credit squeeze, there are now more borrowers who are being forced onto SVR as they simply can’t get a more competitive deal elsewhere which means this is a serious problem for them. Last month took us all by surprise, and lenders do have to defend their margins in this environment, but it shouldn’t be at the expense of their loyal customers, many of whom are really feeling the pinch.
"Lenders are between a rock and a hard place. They need to keep savings rates high, because they need to attract retail balances to plug their funding gap. And despite what the Government says, they don’t want to lend money, so they actually aren’t that interested in offering a good deal to either new or existing borrowers. In fact if customers started to redeem mortgages (especially riskier, sub prime customers) lenders would be delighted. It will be interesting to watch the Government trying to impose its will on lenders, as we’ve seen today with MPs calling on lenders to pass on rate cuts."
"The general feeling is that base rate will be cut again this week and I wouldn’t be surprised if some lenders who have remained quiet so far will try and wrap any new cut in with last month’s, and hope that their customers don’t put two and two together. We will be watching closely and advise any lenders who haven’t yet come clean to do so in an honest and transparent manner."
