Law firm Leon Kaye is investigating the legality of Skipton Building Society’s decision to increase its Standard Variable Rate (SVR) to 4.96%.

The London-based legal practice claims that Skipton guaranteed tens of thousands of borrowers that the SVR would never be more than 3% points above the Bank of England base rate. It says that the mutual is to argue that is that the economic downturn and the credit crunch have triggered the ‘exceptional circumstances’ clause which is written into its SVR mortgages.

On its web site, Leon Kaye says: “These ‘exceptional circumstances’ clauses are normally submitted into contracts to ensure that the Lender has an element of control if things turn bad. However such clauses can fall foul of the Unfair Contract Terms Act 1977.