Concerns re Skipton BS Commercial Mortgage

by Readers Question

13:56 PM, 27th March 2014
About 5 years ago

Concerns re Skipton BS Commercial Mortgage

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Concerns re Skipton BS Commercial Mortgage

We have a small office building in the home counties which was purchased with the help of al loan from the Skipton BS eight and a half year’s ago. Concerns re Skipton BS Commercial Mortgage

Times have not been kind to the commercial property market since 2008 and we have not been immune to that although we have never been late with a payment on the loan.

After a period of some months of vacancy we are just now managing to get the building relet albeit at a lower rent.

As a part of this process it is a normal requirement to send the new lease(s) to the lender for their approval and this we have duly done.

I strongly suspect that it is the lease approval process which has triggered the sending in of the valuers as Skipton will have spotted the lower rent.

Unfortunately, Skipton have a bit of a reputation and I am very concerned that they will use this as an opportunity to obtain a very low valuation and call in the loan.

Is there anyway that I can stop them doing this?

Has anybody else had experience of Skipton with this and if so how did it go?

Regards

Badger



Comments

Mark Alexander

14:00 PM, 27th March 2014
About 5 years ago

Hi Badger

It's time to take another look at your offer letter and T&C's I'm afraid.

Some commercial mortgages have LTV and interest rate covenants built into them. If these are breached then lenders have the right to call in loans or LPA receivers. They are more likely to consider this if your loan is structured on particularly favourable terms, e.g. very low interest rates. Commercial lenders are .... err ..... commercial? If they can can legally recover their money due to broken promises and lend it out at a higher rate they might just do that. They may also attempt to renegotiate their terms with you.

If you have breached your T&C's I suggest you start considering exit strategies ASAP, i.e. sale or refinance.

Have a chat with a few agents to get a good idea of what the property is worth.
.

Badger

14:32 PM, 27th March 2014
About 5 years ago

I have just got off the phone to Skipton who absolutely assure me that there is nothing sinister in this and that it is merely routine, being a product of an ongoing program to revalue their commercial property book in order to stay within the rules imposed by their regulator.

I am also further assured that this move has nothing to do with the recent submission to them of a new lease for their approval and that furthermore the Skipton commercial loan agreement has no provisions within it to force a valuation in respect of any of the covenants anyway.

Whilst this was good to hear I remain nervous and cynical that their true motivations may not be quite as kindly explained to me by the nice young lady that I spoke to.

I have therefore requested and been assured that I will receive a letter making the above points clear in writing.

I would nevertheless very much appreciate hearing of the experiences of anybody else with a commercial loan from Skipton as I hear anecdotally that they are "intensely inflexible" in matters various when they get the bit between their teeth.

Forewarned is forearmed as the saying goes.

(Now off to run the proverbial fine-toothed comb through the enormous loan agreement to see what I can find to upset myself... see forewarned etc. above.)

James Rossi

14:58 PM, 27th March 2014
About 5 years ago

I'm in the unfortunate position that I had one of my BTL's with Bank of Ireland and having my main mortgage with Amber (nee Skipton). As per the previous advice sometimes it's a bitter pill to swallow but the harsh reality is to just bail out. I've sold my BTL I had with BoI and walked away with a decent amount of equity and it's also like a dark cloud being lifted. Since BoI hiked the trackers it didn't take much number crunching to rid myself of them. There's far easier ways to make money.

Being coupled to these is like being in a marriage or relationship gone bad, you know you need to move on it's just taking that first step. I'd take advantage of the positive sentiment within the economy and consider. I don't know how the market is in the Home Counties as I'm in the South West but just stick "office for sale + your postcode" in to Google and see what results you get, this may help you make a decision. Sorry it's not more positive. Unfortunately commercial lenders are answerable to no one save themselves.

There is, of course, the wider picture and this is your health and how long do you want to live with any level of stress.

Skipton aren't going to do you any favours, believe me. I've had no alternative but to go to the FOS even when I showed them something they'd written in black and white they still persisted. This is what you're up against. Reading your post I sense that the sentiment runs right through Skipton.

The other problem is, of course, there's very little protection there for commercial or BTL as we're all considered 'commercially savvy' and even if we could seek help from the FCA they'd hide under their desks and sit on their hands just as they have done with the BoI tracker case.

Best of luck

Mark Alexander

15:36 PM, 27th March 2014
About 5 years ago

Reply to the comment left by "James Rossi" at "27/03/2014 - 14:58":

Hi James

Are you referring to the 3% over BoE rate cap in Skipton SVR mortgage terms which they chose to ignore a few years ago by any chance?

If so, I'd like to discuss that with you offline. I'm well up for another crusade, especially one with 63,000 affected borrowers 😉

My email address is mark@property118.com
.


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