10:27 AM, 29th April 2016, About 8 years ago 67

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COURT OF APPEAL UPDATE - West Brom Tracker case
Our legal team from Cotswold Barristers and Michael Ashcroft QC were superb at The Court of Appeal. Three judges sat on the panel to hear our case, two Lords Justices of Appeal and one Lady Justice, the most eminent being the Rt Hon Lord Justice Leveson, President of the Queen’s Bench Division and third most senior Judge in the UK

For those who don’t know, with the backing of over 400 other landlords I took up a legal battle with the West Bromwich Mortgage Company.

The background to the case is that the mortgage lender provided me with a fixed rate mortgage which reverted after an initial fixed rate period to a tracker rate mortgage at bank base rate plus 1.99% to the term end. The loan term was 25 years.

In September 2013, along with thousands of other borrowers who had similar mortgages, I received a letter stating that my mortgage lender was varying my interest rate despite there being no change to the base rate. As if that wasn’t enough to make me furious, their letter carried a veiled threat, stating they had to increase the rate for their own commercial purposes, failing which they would have to consider calling in the loan. Note that my loan wasn’t and has never been in default.

Thankfully, enough other landlords were equally furious and we found each other via Property118. Without their financial support I would not have been able to mount a legal battle of this nature.

The rate rise only affected me to the tune of just over £100 a month but that wasn’t the point. It was about the principle.

Over £500,000 has been raised to fight this case!

We knew the West Brom would play dirty and do all they could to run up legal bills in the hope that we would drop our case. Before this move the Building Society was losing millions every year. This rate rise secured their solvency and returned their failing business back into a profitable position.

Needless to say, they underestimated our resolve.

We should have a verdict in a few weeks time, we are not sure exactly when.

Win or lose, I am incredibly proud that landlords were able to come together to show the world that big financial institutions must not assume that just because they have deeper pockets than their customers they are always in the right. Our group has achieved something that the landlord associations refused to entertain. We fought back!

Even if the Appeal Court Judges were to decide that technically the West Brom contract is how the West Brom lawyers perceive it, this case has shown the world the true colours of this building society. If the lender had made it clear to any of the affected borrowers that their contracts were intended to enable them to vary tracker mortgage margins, or to call in a 25 year loan with just 30 days notice without it being in default, I very much doubt that any borrower, or indeed broker, would have given them their business.

All who attended the Appeal today are as confident as I am that justice will prevail. The prior preparation and planning and the level of detail and the commitment to research undertaken by the team at Cotswold Barristers was admirably extensive and could not have been better presented by Michael Ashcroft

We all felt the three Appeal Judges were able to see through the ludicrous excuses made by the mortgage lender and the unfairness of what they’ve done. It could of course simply be that the judges were “playing to the gallery” but their cutting remarks to the QC representing West Brom seemed very genuine to all in the room.

The Court room was packed!

We live in hope that landlords will continue to come together and fight injustice, whether that comes from mortgage lenders, government policy or elsewhere.

The landlords associations continually fail to represent landlords when it really counts, this case is just one example, there have been far too many others. It is down to all is to fight injustices, of which there are many,  #tenanttax being the hot topic of late.

Please share this message with as many landlords as you know.

If we do win this case, we would like to think it will inspire other landlords to unite, raise funds and fight similar cases where we know we are in the right.

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Mark Smith Head of Chambers Cotswold Barristers

18:59 PM, 17th May 2016, About 8 years ago

But see the 2015 Mortgage Credit Directive

The legislation gives a series of circumstances that would constitute a buy-to-let customer acting for the purposes of business, and therefore taking them outside the legislation.

These include where the customer:

uses the mortgage to purchase a property, intending to rent it out
has previously purchased the property intending to let it out and neither they nor their relatives have lived there
already owns another property that has been let out on a rental basis
The legislation also enables a firm to presume that a customer is acting for his/her business if the agreement includes a declaration from them stating this fact, and that they understand that they are forgoing protections offered by the legislation to consumers, unless the firm has reasonable cause to suspect that this is not the case.

Thus, anyone who has one BTL for letting to someone unconnected with them is acting in the way of business


23:18 PM, 17th May 2016, About 8 years ago

c24 clearly makes individual LL investors and def not business !!!

Andy Bell

17:25 PM, 19th May 2016, About 8 years ago

Any one else got another 0.1% knocked off the rate letters?

Graham Durkin

17:39 PM, 19th May 2016, About 8 years ago

Yes got mine this morning ,bang on the 6 month point again, for me nothing has changed but to them business has clearly improved or are they just playing the game according to their interpretation.

Richard Mann

7:46 AM, 20th May 2016, About 8 years ago

Reply to the comment left by "Mark Smith (Barrister-At-Law)" at "17/05/2016 - 18:59":

Wow, this is such a relevant powerful fact.
The weight of this seems to have escaped one to two contributors.
Can this information be shared with Steve Bolton and the other members of 118 that are preparing the review of Section 24?
Surely this one piece of information qualifies all BTLs officially as a business and that taxes on interest are to be justifiably claimed as a "business expense"

Anthony Wilson

9:37 AM, 20th May 2016, About 8 years ago

Thanks Mark

I would have liked to have been there.. no doubt I will be able to read the judgement in due course so fingers crossed.

Robert M

9:58 AM, 20th May 2016, About 8 years ago

Reply to the comment left by "Richard Mann" at "20/05/2016 - 07:46":

Thank you Richard

The implications of Mark's comments had indeed passed me by. But is that "Directive" now UK law? (I know some EU Directives are not accepted or implemented into UK law, or their implementation is delayed indefinitely for political reasons, e.g. the right of prisoners to vote).

Was the Directive cited during the court case? If not, then presumably it is a ground for a further legal challenge (Judicial Review) if the first challenge fails? (but hopefully it won't fail).

Does it also affect the other taxation of income from property, which I believe is taxed differently to income from self-employment?

Mark Smith Head of Chambers Cotswold Barristers

10:05 AM, 20th May 2016, About 8 years ago

The MCD is implemented in our law as far as I can tell from the FCA website.

It means that any loan written that falls within the criteria will fall outside consumer protection legislation; how this affects your tax is another matter.

Richard Mann

12:15 PM, 20th May 2016, About 8 years ago

Thank you Mark Smith for posting this.
I'm as baffled as most I am sure, that clearly section 24 is ridiculously biased and can push many people to bankruptcy or taxes on zero profits.
Unfortunately I feel the Chancellor would have known full well that this is the case but still pushed this through regardless.
The repurcussions are yet to be felt fully, a little like a pending storm, I for one do not foresee anything positive from this legal arm twisting maneuvre.
While deep inside I want the judicial review to come down on the side of the Lettings business owners, as so often happens the obvious is often overlooked in favour of the ridiculous and untenable.
Am I alone in feeling that they're are two governments?
One which is in power and manipulating the system like a marionette master and the other. " shadow government " doing whatever it does to keep things operating ...

14:57 PM, 8th June 2016, About 8 years ago


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