The Property118 Action group is seeking to challenge the Skipton over its apparent ‘abandonment’ of a contractual commitment to cap their standard variable mortgage rates at 3% over the Bank of England Base Rate. It is also planning legal action against the Bank of Ireland on its decision to add a premium to tracker rate mortgage margins.
The group, led by property investor Mark Alexander, has launched a crowdfunding campaign to raise the money needed to bring such cases to court.
Last month, the Property118 group won a Court of Appeal case against the West Bromwich Building Society, after some 6,000 buy-to-let borrowers were affected by a rate hike on tracker mortgages, despite no change to the linked Bank Base Rate. The landlords’ success has prompted the group to campaign for cases against the Skipton and BoI to be reopened.
On the group’s crowdfunding page, it said: “In March 2013, Bank of Ireland raised tracker rate mortgage margins. Over 13,000 borrowers were affected. Many of these originally took mortgages with Bristol & West which was taken over by Bank of Ireland. Two barristers and one QC provided written opinion that they believed the bank were [sic] in breach of contract.”
It added that providing funding for legal action was a struggle for borrowers at the time without the support of Property118, which wasn’t then in existence, and the Financial Ombudsman ruled in favour of the bank.
But a spokeswoman for the Bank of Ireland said The West Brom case was not comparable to the one currently being brought against it.
“Bank of Ireland’s offer document and mortgage terms and conditions expressly stipulated that the tracking margin or differential could be varied, and the Offer and Mortgage Conditions documents are consistent allowing for the differential to be lawfully changed.”
Additionally, Property118 said around 135,000 borrowers were affected by changes to the Skipton’s contractual agreement. FOS also ruled the lender was within its rights to make the changes.
Skipton said its position on the matter was unchanged since the verdict made by the Ombudsman.
“Skipton remains firmly of the opinion that under the terms and conditions of its mortgage offer it lawfully had the right to remove the standard variable rate ceiling that applied until 1 March 2010,” it said.
“The recent decision of the Court of Appeal in the Alexander v West Bromwich Mortgage Company case was very fact specific regarding an inconsistency in mortgage documentation. No such inconsistency can exist with Skipton’s documentation because the relevant key terms were very clearly and fairly laid out in only one document, being the mortgage offer.”