You are here: Home - News -

Landlords lose West Brom tracker case

  • 29/01/2015
  • 0
Landlords lose West Brom tracker case
The High Court has ruled in favour of West Bromwich Building Society over a group of landlords who argued that the lender upped rates on its tracker mortgages despite no change to the linked Bank Base Rate.

The case saw over 360 landlords bring their claim against the West Brom for upping tracker rates on 6,700 deals in December 2013 by 1.5% to 3.99%, while the Bank of England Base Rate remained static.

Delivering his judgement, Mr Justice Teare ruled that the lender was within its rights to increase the premium on the rate it charged above the Base Rate. He also said West Brom had the right to call in mortgages with 30 days’ notice.

In a Mortgage Solutions analysis piece on the issue, founder of the website Property 118 Mark Alexander, who grouped together landlords to launch a class action against the lender, said a victory for West Brom could badly damage business for landlords and owner-occupiers.

Following the court’s judgement, Alexander said he was “extremely disappointed” with the outcome and planned to appeal the case.

In a statement on the Property 118 website, Mark Smith of Cotswold Barristers who represented the landlords said: “The borrowers that I represent believed that they were protected from the risk of the financial needs of the lender resulting in an increase of the rates they paid by virtue of their contracts being ‘tracker’ mortgages.

“There will be a significant number of negligence claims against brokers and solicitors for failing to advise that the true meaning of the contract the borrower signed was that the lender’s obligation to track the reference rate could be dispensed with; that in effect there is no meaningful distinction between tracker and standard variable rates so far as the power of the lender is concerned,” he added.

“There may also be mis-selling claims arising from the publicity that WBBS and its group promoted, which stated that tracker mortgages gave the ‘certainty’ of knowing that the rate would move in line with the Base Rate, when this was not the case.”

There are 0 Comment(s)

You may also be interested in