Tag Archives: Landlord news

Which Commercial lenders are hungry for business? Commercial Finance, Landlord News, Latest Articles, Property News

Did you know that commercial lenders have three main categories of manager called Hunters, Farmers and Retailers?

This is very relevant if your business is dependent upon knowing which commercial lenders are hungry for business. Before I explain, please allow me to introduce myself. My name is Cliff Verrill, I’m a commercial finance broker and previously worked with Mark Alexander (founder of Property118.com) when he ran The Money Centre. We have remained very good friends.

I’m a member of the National Association of Commercial Finance Brokers (NACFB) and my current firm are sponsors of Property118, having supported the community with over £20,000 of investment in 2013 alone. You can read more about me on my Member Profile.

Now back to my explanation …… Continue reading Which Commercial lenders are hungry for business?


Barry’s story – it could have been you! Financial Advice, Landlord News, Latest Articles, Property News

Barry’s story was written by the Mark Alexander back in December 2010. It has since been updated and re-published several times. The dates, times and people are fictional but the story is based on real life events.

It’s a modern update of the classic “A Widow’s story”, this time written as a cautionary tale for landlords and their families.

Barry is 53 years old and married to Sharon. They have three teenage children; twin girls aged 15 and a 13 year old son. Barry worked as a self employed salesman in the plant hire business. Sharon had a part time secretarial job in a local school.

Barry and Sharon purchased their first investment property in 1996.

As property values have risen they have continuously remortgaged and used a proportion of the equity released as deposits to purchase additional rental properties. They also saved a proportion of the equity released for a rainy day. To accelerate the growth of their portfolio Barry and Sharon raised extra cash for deposits by remortgaging their home. The profits from Barry’s plant hire business covered the family’s commitments comfortably.

They had accumulated a portfolio of 23 properties with a combined valuation of £1,650,000, against which they had mortgages of £1,400,000.  The portfolio produces rental income of £87,000 per annum. Their rainy day fund amounted to just over £64,000. By having all of the above in place you might be forgiven for thinking that they had set themselves up with a very safe future.

On Sunday 21st December Barry had a bad day. He was on the way home that evening having just been out to fix a tenants leaking shower tray when the traffic on the M6 came to a grinding halt. Barry managed to stop his car, avoiding the lorry in front of him, but the car behind him ploughed into the back of him, wedging his car under the back of the lorry.

The emergency services managed to free Barry from the wreck and his only damage was shock, whiplash and major bruising to his legs. However, two days later Barry collapsed whilst out shopping for last minute Christmas presents. He was rushed to hospital where it was discovered that a blood clot in Barry’s leg had passed to his brain. Barry had suffered a major stroke.

He lost his speech and most of the use of one side of his body. The family were in tatters. Sharon had to give up work to care for him.

Up until having a stroke Barry had managed the property portfolio and taken care of most of the maintenance himself. Could Sharon care for her husband, her family and the management and maintenance of the property portfolio too?

They considered putting the properties on the market but soon realised that after deducting selling costs and CGT there wouldn’t be much money left over. They would also lose their income and they would be leaving their tenants in a difficult predicament too. Sharon has had to employ a lettings agent to manage the portfolio. Since then it has cost the family an average circa £3,000 a month to pay for ongoing maintenance and management.

Fortunately there has been some good news, at least financially. First, low interest rates have meant that Barry and Sharon’s mortgages have got much cheaper than when they started their property rental business. Many of their mortgages have reverted to tracker products due to their fixed rates coming to an end. They are focussing on Barry’s recovery. What will happen when interest rates go back up again though? How will the restrictions on finance cost relief for individual landlords affect them?

The real saviour for the family has been insurance. Fortunately, Barry and Sharon were astute enough to insure against these eventualities. They took out life assurance policies that pay out a regular monthly income right up to Barry’s 65th birthday. These policies were written on the basis that they also pay out in the event of a critical illness. The family are therefore confident that these provisions will see them through these troubled times and out the other side. They will then revert to plan A, which was to live off surplus rental income over and above the mortgage payments on their portfolio or to sell the properties and live off their gains.

What insurance provisions have you made for your family?

How are you investing the windfall of increased cashflow that record low interest rates have produced for your family?

Have you made similar provisions to Barry and Sharon?  If you haven’t it may not be too late, we want to help.  If you have already taken advice and put insurances into place we would like to introduce you to one of our recommended advisers to review your policies and ensure they are competitive. Most important of all, to ensure that the right person gets the right money at the right time.


FOS rule West Brom Tracker Rate Hike is fair Advice, Landlords Stories, Latest Articles, Legal, Mortgage News, Property Investment News, Property118 News

The FOS (Financial Ombudsman Service) have done it again! FOS rule West Brom Tracker Rate Hike is fair

In the past the FOS have controversially agreed that rate hikes applied by Bank of Ireland, Skipton Building Society (Amber Homeloans) and also the Danske Bank (formerly National Irish Bank) were fair. Therefore, is it really that shocking that FOS would also rule in favour of West Bromwich Mortgage Company?

Following a judicial review in the case of Millar & anor -v- Financial Services Ombudsman [2014] IEIC Mr Justice Garard Hogan recently ruled that the Irish FOS were wrong in their contractual interpretation in a rate hike case that the Millars brought against Danske Bank [source1].

This supports the Property118 members’ lack of confidence in the UK FoS decision making process, and hence the decision for Property118 to raise funds to enable their members legal team to stand toe to toe on 21st January 2015 with the West Brom legal team at the Commercial Courts in the Rolls Building.

Property118 members have raised nearly £500,000 and these funds are set to grow as a result of people who complained to the FOS realising that Property118 were right all along to take a representative action to the Courts.

The National Landlords Association initially recommended its members to pursue the FOS route and await the outcome of that before considering legal action. Many of those who followed this advice are enquiring about joining the representative action organised by Property118 as a result of the FOS finding. **West Brom has indicated through its legal team that it will apply the finding of the Court across the board to all affected borrowers**, so all additional support to ensure the right result is achieved is essential.

The Property118 representative group are happy to welcome all who have received the FOS rejection letter. The same financial commitments to those who joined prior to the deadline will apply, plus a small price for the administration costs associated with Cotswold Barristers applying to the Courts to have the names of the newly represented participants added to the claim. A new deadline of 19th December has been applied, this will definitely be the final deadline for legal reasons.

Newcomers are interested in joining the fight in the full knowledge that sufficient funds have already been raised and that the case will be heard on 21st January 2015.

Each member has paid £1,000 into an escrow account held by BARCO (The Bar Council’s Escrow service) plus a further £500 to Property118 and Cotswold Barristers to cover legal costs and associated running and marketing costs of the campaign for each represented mortgage account. Some members have a dozen or more represented mortgages, most have one or two. In the event of the case being won the majority of funds will be returned, plus of course a refund of any over-payments to West Brom and the satisfaction of their terms being upheld as per the borrowers understanding of the tracker rate mortgage contracts they entered into.

Every newcomer to the Property118 reduces the financial exposure to the funds already raised on the basis that all costs are shared pro-rata to funds committed.

** Beware false promises! **

Back in 2009 the CEO of the Skipton Building Society went on record that they would honour an interest rate cap [source2] just one year before that promise was reneged upon [source3]. However, insufficient funds were raised to take the case to court and borrowers have been left high and dry by the FOS and the FCA who decided the rate hike was fair despite the promises made. Perhaps that’s why West Brom borrowers want the certainty of being represented in the Property118 vs West Brom Court case, whilst it is still such a cost effective option?

If you are affected, and are not already a member of the Representative Action, please complete the form below for more details on how to get involved.

Oops! We could not locate your form.

 


Message from Anthony Wilson of Ashley Wilson Solicitors LLP Ask Me Anything, Buy to Let News, Guest Articles, Landlord News, Landlords Stories, Latest Articles, Legal, Mortgage News, Property Investment News, Property News, The GOOD Landlords Campaign

Anthony Wilson of Ashley Wilson Solicitors LLPMy name is Tony Wilson.

I have today committed £15,000.00 to the fund to enable Mark Alexander and Mark Smith carry on the superb work they are doing on behalf of buy to let landlords who are being (in my view) mistreated by the West Bromwich Mortgage Company.

As a solicitor who has been in private practice for over 25 years and specialising in property throughout that time I am appalled at the way in which West Brom have sought to justify their unilateral action and I believe it is entirely correct that we should pursue a collective representative action in the way advised by Mark Smith which limits the financial risk to all concerned while giving us a voice to remedy this injustice.

I have done my due diligence before parting with any funds and I am fully satisfied that the route suggested by Mark Smith and Mark Alexander with funds protected within the Barco account gives us all maximum financial protection.

I also applaud Mark Alexander for leading this campaign.. which clearly deserves maximum public exposure.

This is not the first time over the last five years when I have been subject to a financial institution taking unilateral action despite the terms of a written agreement on the artificial basis “that it cannot afford it.” This type of action needs to continue to be challenged … the compensation payments having to be made by such institutions are increasing all the time now that the “chickens are coming home to roost”.

I urge everyone who has been affected by the West Broms behaviour to stand up and be counted .. to provide the financial resources to give us the maximum chance of securing a positive result and to ensure that the decision makers at the West Brom who have been arrogant to enough to make this decision unilaterally without first seeking judicial sanction..are accountable to their members for their inappropriate conduct.

I believe that we will win.. but win or lose this behaviour needs to be challenged.

Tony Wilson (Anthony Ashley Wilson)

Follow Up Comment

Thank to everyone for their positive comments about my post…. in a way I actually feel privileged to be part of it when I consider all the hard work and commitment which has been put into this to date by Mark and others..it is encouraging to know that the fund is heading in the right direction.. . if anyone has any doubts.. I am happy to discuss with them direct why I decided to participate.

Editors Note

To read the response comments from other campaign members please click HERE

To view Tony’s member profile please click HERE

To find out how to get involved please complete the form below

The deadline for submission of instructions has now expired, sorry.

 


Property118 Members vs West Bromwich Mortgage Company Advice, Buy to Let News, Cautionary Tales, Favourite Articles, Financial Advice, Landlord News, Landlords Stories, Latest Articles, Legal, Mortgage News, Press, Property Investment News, Property Investment Strategies, Property News, Property118 News

UPDATE – 31st March 2014

Since publishing this article our campaign has raised over £450,000 and legal action has now commenced. The official closing date for borrowers to be represented in this action was 28th March 2014. However, it may still be possible to be included in the representative action by paying additional fees to cover administration and Court fees to be added to the list of represented claimants. For further details please Contact Carla Morris-Papps at Cotswold Barristers – telephone 01242 639 454 or email carla@cotswoldbarristers.co.uk

West Brom Tracker Mortgages

Property118 Members vs West Bromwich Mortgage Company

Property118 Members vs West Bromwich Mortgage Company

Borrowers representing 84 mortgage accounts affected by the West Bromwich Mortgage Company 1.9% rake hike to their tracker rate mortgage margins attended a secret meeting of paid up campaign members on 27th February 2014. At that meeting it was confirmed that 420 affected mortgages are currently represented by the campaign group.

Property118 had previously created a secure forum for paid up members of the group to discuss various legal strategies, one of which was a proposal to West Brom to consider arbitration as an alternative to Court action. Each member had paid £240 for each affected mortgage plus a contribution to a campaign marketing campaign.

Arbitration was proposed for tactical legal reasons which were explained by the groups advisers, some details of which must remain confidential for legal reasons.

This would have been significantly quicker and cheaper for all concerned and had massive upsides to West Brom in that the outcome would be confidential. In other words, if West Brom had lost the case, nobody would have “officially” known about it other than those who had already paid to be a member of the campaign group. This would have meant the worst case scenario for West Brom would be losing no more than 10% of their reported £19 million of additional annual profits from this rate hike.

West Brom refused!

This refusal now plays very nicely into our hands for litigation purposes as it will be frowned upon by the Courts, especially if we lose our case and end up having to pay costs associated with the David and Goliath battle. 😉

The attendees of the meeting voted unanimously to proceed immediately with litigation on the basis proposed by (Mark Smith – Barrister-At-Law) as explained below. Thanks were offered to Justin Selig and his team at The Law Department for his sterling work to date in helping us get to this position. Without their help our campaign may never have got this far.

Litigation will commence during the week of 31st March 2014 with the service of Court Papers. This provides a final opportunity for any remaining affected borrowers to commit to the action by Friday 28th March.

We already have more than double the necessary funds on account to pay our own legal team. Mark Smith has agreed to represent borrowers for a fixed fee of £120 + VAT per affected mortgage subject to there being at least 250 borrowers committed. Further details in his Terms of Business and Instruction letter which can be downloaded by completing the form at the bottom of this page.

Existing campaign members are also reminded that they MUST complete and return the instruction form  to Mark Smith to act for them and the required additional funds by 28th March 2014.

Oops! We could not locate your form.

Costs Funding

The primary concern of existing members that had to be overcome was their potentially unlimited liability to the West Brom’s legal costs in the event of losing the case and the “open cheque book” often associated with legal cases. It was agreed that all fears could be overcome by creating a fund to be held in a BARCO escrow account (BARCO is the Bar Council – the regulators of Barristers). This account will provide evidence to the Courts that we have sufficient funds on account to settle the other sides costs in the event of losing the case and having an adverse costs order awarded against the group.

The first step of the legal action will be a costs hearing, as part of a “Case Management Conference”. This is where both sides must submit their costs budgets for the case to the judge and where the judge decides upon reasonableness. If either side fails to do this then the maximum they can claim for costs against the other side is the Court fee, i.e. £175! It is extremely rare for judges to award costs in excess of the agreed costs budget.

Our estimate is that based on the number of affected mortgages being represented, and the possibility of more people now wishing to be represented at this stage, the BARCO account could contain as much as double the other sides costs budget. This is why we are so confident about costs not exceeding the amount of funds that will be held in escrow. In the extremely unlikely event of the groups funds being insufficient to meet a potential costs order the group would have an opportunity to withdraw their case and settle the other sides costs to date.

If/when we win, the contents of the BARCO account will be rolled over to deal with all of the costs associated with the inevitable appeal case and if/when that is won the funds will be returned to members. If we lose, the contents of the escrow account will be used to pay costs awarded to West Brom and the balance of funds will be returned pro-rata to members.

The case will be fought on the basis of a representative action. This means that the ruling of the Courts will only apply to those borrowers who have paid to be represented in the case. There will be no free rides!

We fully appreciate that some affected borrowers will not be able to raise the necessary funds in time to be part of this action so there is a Plan B. Affected borrowers who are not represented may have another opportunity to make claims in a few years time. In the meantime they will continue to pay the higher rate and will probably be expected to forfeit any refund of overpayments in return for a no-win-no-fee arrangement. This could be a far more expensive option, hence the reason why so many affected borrowers are so keen to be part of the imminent legal action.

The legal strategy and process we are undertaking will be a very simple one. There will be no witnesses called so there will be no surprise twists such as those often seen on TV where a new witness or new evidence appears at the last minute. On this basis, we anticipate the case, including any appeal, to be concluded before Christmas.

We will only be asking the Courts to rule on two things:-

1) Based on the documentation produced by West Brom, do they have the right to increase the tracker margin?

2) Based on the documentation produced by West Brom, do they have the right to call in loans within 28 days without the borrower being in default?

There has been lots of discussion about whether West Brom did or did not provide all of the documentation they are now relying upon. This is not relevant to our case.

There has also been much discussion about Unfair Terms in Consumer Contract Regulations; again this is not relevant to our case.

It has been questioned whether in fact the mortgages issued by West Brom were indeed trackers, this cannot be denied by West Brom as this is the basis they report them to the rating standards agencies – see this link

The agreed level of funds to be deposited into the BARCO account is £1,144 per affected mortgage being represented. For example, somebody wishing to have 10 affected mortgages represented will need to deposit a further £11,440 into the BARCO account. Existing members will receive a refund of unused funds which they paid into the client account of The Law Department. New members will need to pay an additional premium of £356 per mortgage to the Property118 marketing fund to equalise the financial contributions and efforts of the forerunners of the group.

Therefore, the net payment per affected mortgage for members will be:

  • For existing members who have already instructed The Law Department £994 (assuming a refund of £150 per affected mortgage from The Law Department)
  • For new members the total cost per mortgage to be represented will be £1,500

We have created a simple set of instructions explaining how much you need to pay and who you need to pay it to here >>> http://www.property118.com/simplified-payment-instructions-join-west-brom-action/

Remember, if/when we win you will get more than this amount back when you also factor in 100% of the extra 1.9% interest you have been paying which will also be refunded. The worst case scenario is that you will get none of this money back if we lose. If you can live with that you should proceed.

The reason we have chosen this strategy as opposed to buying ATE insurance is that it costs us much less if we win. We are in this to win this. The above strategy means that we all know what we stand to lose and can proceed with our eyes wide open, confident that our liabilities are limited.

If the balance of the BARCO account associated with this action is less than £250,000 by close of business on Friday 28th March 2014 the legal action case will be aborted, funds will be returned to members within 14 days and that will be the end of the line for this campaign for myself and Property118 – at least for 12 months or more anyway. If necessary we will then take another look at Plan B.

UPDATE – 31st March 2014

Since publishing this article our campaign has raised over £450,000 and legal action has now commenced. The official closing date for borrowers to be represented in this action was 28th March 2014. However, it may still be possible to be included in the representative action by paying additional fees to cover administration and Court fees to be added to the list of represented claimants. For further details please Contact Carla Morris-Papps at Cotswold Barristers – telephone 01242 639 454 or email carla@cotswoldbarristers.co.uk


Bank of Ireland Tracker Rate Legal Campaign Fundraising re-launched Latest Articles

The Bank of Ireland Tracker Rate Legal Campaign began in March 2013.

History to date

100 affected BoI borrowers each paid £150 plus VAT into an initial legal fees fighting fund and instructed Justin Selig of The Law Department to obtain Counsels opinion on the merits of our case.

Consensus of legal opinions was that regulators should fight the case on several bases including Unfair Terms in Consumer Contract Regulations.

Detailed complaint letters were prepared by The Law Department with assistance of Counsel and submitted to the OFT, FOS and the FCA.

The OFT immediately passed their case over to the FCA.

The FCA sought our permission to send our complaint to the Bank of Ireland on the understanding that we would be copied into their response. BoI employed a QC to respond to the FCA and our legal team duly received a copy which was “wishy washy” to say the least. Nevertheless, the FCA felt they had concluded their duties and didn’t consider our case any further.

The FOS are still prevaricating after 10 months!

The complexities of the case lead us to believe, at the time, that it was unlikely that we would be able to raise sufficient funds to progress to Court. Therefore, fundraising was suspended whilst we re-grouped to consider our options. Nevertheless, the PR battle has progressed well on the back of a very similar case affecting borrowers of the West Brom Mortgage Company. A few hundred additional borrowers have completed an “Expression of Interest” form in respect of taking legal action against the Bank of Ireland since the fundraising was suspended. These people have paid nothing.

Moving forward

Those members who paid fees into the legal action fund have been briefed on considerable work undertaken by The Law Department, Counsel and even a QC, all of which have been working without payment since fundraising was suspended. Given the success of the fundraising for legal action against the West Brom Mortgage Company and the advice and strategies agreed between the enhanced legal team we are now far more confident that funds will be raised and that privately funded litigation will be successful.

To obtain a copy of the briefing which was sent to clients who instructed The Law Department, so that you can make a decision of whether to be a party to ongoing legal action, will require you to instruct The Law Department and make an initial payment of £150 plus VAT (i.e. £180 in total).

Payment can be made my cheque payable to “The Law Department Client Account” or by electronic transfer to:

Account Name: The Law Department Client Account

Account Number: 06658997

Sort Code: 12 24 82.

Reference: your full name

To instruct The Law Department you will also need to complete and return a letter of instruction and return it with the following documentation:-

  1. Proof of identity – copy passport of driving licence
  2. Proof of residence – a utility bill for your home address within the last three months
  3. A copy of your mortgage offer letter
  4. If available, a copy of any terms and conditions and other literature you have obtained in connection with your mortgage. This includes and marketing literature.
  5. Link to Letter of Instruction Template HERE

On receipt of the above you will receive further details of advice and strategies. You will then be given the option of whether to commit to litigation or not.

Proceeding to litigation

This will require 150 people to each pay an additional £500 into The Law Department client account as a gesture of commitment and for each affected borrower to agree to a further potential liability of £1,000 if/when litigation commences. If the number of instructions is greater than 150 then the liability will fall pro-rata, for example, if there are 300 instructions the additional potential liability will halve.

If legal action is aborted funds paid will be refunded less costs shared pro-rata.

Our legal team are confident of a positive outcome if sufficient funds can be raised/pledged to commit to further legal action. Bank of Ireland Tracker Rate Legal Campaign Fundraising re-launched

Secure Forum

Members who agree to proceed to litigation on the above terms will be granted access to a highly secure internet forum. The forum operates on the same technology as electronic banking, is hidden from search engines and has several additional layers of security. The purpose of this forum will be to share confidential, commercially sensitive and legally privileged strategies and for members to ask questions, either via private messages or via the secure forum where Q&A’s are likely to be of interest to all members. The private messaging service will also enable members to communicate in confidence, and securely, between themselves, e.g. to swap telephone numbers.

To-Do List – 4 simple steps

1) Tell everybody you know to support the marketing campaign (details below)

2) Share this post via your social networks (see icons at the bottom of this page)

3) If you use Twitter please re-tweet these Tweets…


4) Marketing

The success of our campaigns are highly dependent upon quality marketing including PR and meeting with centres of influence. Property118 operates a “not for profit” business model and is, therefore, totally reliant of donations to fund marketing and other activities such as the creation and ongoing hosting our the above mentioned secure forum. Whether you are immediately affected by a tracker rate hike or not, it is in your interests to support the Property118 marketing fund to raise awareness of important issues which could affect all landlords and to discourage lenders which YOU have tracker rate mortgages with from hiking your tracker rate margins. For further details please CLICK HERE.

All comments via the existing Bank of Ireland discussion thread please CLICK HERE


Campaigns Against Tracker Mortgage Rate Hikes Reach Parliament Latest Articles

David Morris MP and Mark Alexander considering an Early Day Motion at the Houses of Parliament 21-01-2014

David Morris MP and Mark Alexander considering an Early Day Motion at the Houses of Parliament 21-01-2014

The campaigns organised by members of Property118 against hikes to tracker rate mortgage margins moved up a gear yesterday when I was invited to meet with David Morris MP and his aide Andre Walker at The Houses of Parliament. I spent 90 minutes with them in total. I also managed to get a very quick 5 minute meeting in between parliamentary debates with Jason McCartney MP (Colne Valley) who has been very supportive of our campaign in terms of meeting his locally affected constituents and lobbying fellow MPs.

Over 20 MPs have expressed concerns and support for their  constituents affected by the actions of West Brom Building Society and Bank of Ireland. A debate in the House of Commons has already been applied for by two MPs.

Campaigners have been lobbying their MPs over the last few months and much support has been pledged. Many of the MPs wrote to John Westhoff, CEO of the West Brom, but all were fobbed off by similar letters claiming that their rate hikes were legal and necessary to subsidise other areas of there business which have performed badly in recent years. Senior banking barristers and an eminent banking QC have poured over the Terms and Conditions and believe what these lenders are doing to increase their profits is an illegal breach of contracts. In both cases the terms of the mortgage offer letters contractually and legally take precedent over conditions specified in the lenders mortgage conditions booklets which are generic to fixed, standard variable and tracker rate mortgages. It is terms in the more generic booklet that West Brom and Bank of Ireland are ‘hanging their hat on’ in respect of their hikes to the margins being charged to their borrowers over the Bank of England base rate.

Campaigners feel that the mortgage lenders are attempting to use their financial muscle and the disincentive in respect of huge costs to litigate to evade justice but the strategy of these lenders does not appear to be working.

To date, over £100,000 has been raised and lodged with Solicitor Justin Selig which is enough to commence legal action. More will be required to fight a case at appeal which is highly likely as a strategy from the lenders if/when the campaigners win the first round of litigation in the lower Courts. With this in mind, alternative strategies to litigation are being considered to settle the argument out of court in the short term because the MPs cannot progress matters once the judiciary are involved.

As fortune would have it, whilst I was at the meeting David Morris MP was invited to submit a question to Chancellor George Osbourne on Tuesday 28th. Mr Morris seized the opportunity and immediately submitted a question relating to the conduct of mortgage lenders. We should find out later this week whether it is approved.

As if that wasn’t enough from my first visit, I was also introduced to several other MPs between debates. These were only quick introductions but many of them are aware of the campaign due to the excellent lobbying of Property118 members.

The icing on the cake was helping to draft an EDM “Early Day Motion”, which has now been submitted by David Morris MP, which will be publicly available and no doubt of much interest to the press. The more MPs that sign up to support this EDM the more likely it is for the debate to take place and for the motion to be passed. We also prepared a very short briefing note to be distributed to other MPs showing an interest. There is a LOT more to be done on our side too. I need all campaign members, whether directly affected or not, to contact your MP again and to ask them to add their support to Early Day Motion number 976.

I strongly recommend following up any electronic correspondence with a telephone call because MPs are bombarded with thousands of emails every day and they can very easily be overlooked.

To contact your MP please click here, then copy and paste the text below:-

Dear ……

As one of your constituents I am asking you please to add your support to Early Day Motion number 976 as submitted by David Morris MP. Below is the content of the EDM and some background notes for you to consider. Given the importance of this matter I would also request you to apply for a debate. If a telephone call or meeting would help, either with me or the campaign organiser please let me know.

SUBJECT – Conduct of Mortgage Lenders – EDM number 976 

That this house condemns mortgage lenders breaching tracker rate mortgage contracts by unilaterally increasing the margin they charge over the Bank of England base rate in order to increase their profit margins and deliberately targeting borrowers where consumer protection law is ambiguous; and calls on the Government to investigate alleged associated recent activities of the Bank of Ireland and West Bromwich Building Society.

Additional Notes

There are believed to be 2.5 million tracker rate mortgages, i.e. mortgages which track the Bank of England base rate at a fixed margin for a defined period

137,000 readers are following a campaign to expose this scam via the Property118 internet forum as concern that other mortgage lenders will follow suit is increasing

Alleged examples of deliberate misuse of ambiguous consumer protection laws include ….

  • 12,200 Bank of Ireland mortgage accounts whereby a mixture of homeowner mortgages and buy to let mortgage borrowers were targeted – all of which pre-dated the Oct 2008 mortgage regulations
  • 6,700 West Brom Building Society mortgage accounts whereby landlords with 3 or more properties have been targeted – there is no case law to define what would constitute a consumer landlord although there is case law to acknowledge that landlords can be consumers. Therefore, Unfair Consumer Contract Terms legislation may or may not apply and it would appear that the WBBS are relying on affected borrowers not being able to raise sufficient funds to challenge this or litigate other points of contract law.

All comments via the main forums please.

Link to Bank of Ireland forum

Link to West Brom forum

David Morris MP commented “I’m extremely concerned about the fact that mortgage lenders are increasing the margin they make on tracker mortgages. This practise is damaging to the economy, immoral and may even be illegal. The Financial Conduct Authority must investigate this urgently.”

REQUEST FOR HELP!

I expect to be called to London to provide further briefings to both MPs and and the media and intend to use the campaign marketing fund to pay for my travel expenses, wining and dining key contacts and loss of *fee-earning time from other consultancy work, (*capped at a maximum of £500 per day). We need to top this fund up and I am highly reliant on your generosity for this as the people I will be meeting will not be too impressed if the lunch budget only extends to a McDonalds or a Subway! Please donate HERE.

If you haven’t already signed up please complete the form below.


Property Research Tool Latest Articles

UK Property Research Tool
What you need to know and where to find the information

This Property Research Tool is for the benefit of all property buyers, landlords, tenants, owner occupiers and professional advisers associated with property.

Thanks to business sponsors and Property118 Members for their incredibly generous donations making the development of this Property Research Tool.

Property Research generally begins online

Far too many people fall into the trap of not doing proper online research, they see a property they fall in love with or meet a sales person they trust and the deal is done. For those of us who have learned our lessons the hard way, it still takes a long time to wade though websites to complete thourogh due diligence. The really annoying part for me was finding each website individually and then having to enter the same postcode into each one over and over again to find the right pages. For these reasons I wanted to have a system built as a convenient Aide-mémoire (check-list) for every internet user to be able to use and to provide access to to the websites containing vital information with the minimum number of clicks. Property Research Tool

Essentially the Property Research to is a pop up page, called a modal, which consolidates key information used by landlords and other property purchasers to assess properties. Any website can incorporate this technology free of charge. The functionality works best with Google Chrome and Safari internet browsers.

The only data input for users is the Post Code of the area. The key benefit is the ability to access all information required to complete desktop due diligence without having to remember visit multiple websites, thus saving considerable time and effort. The information is called from several websites which provide insight into the location being searched.

Enough of me trying to explain what it is, why not see for yourself?

If you run a website yourself why not write a review and grab the embed code to install the Property Research Tool functionality on your own website? We even have a widget which creates a “call to action” button (like the one below) which you can size to your requirements.

Want to learn even more?

My buy to let property investment strategy is documented and constantly updated in the Advice section of this website. To get back to the main menu >>>

 

Landlords Buy to Let Property Investment Strategy


Complaint to ASA re West Brom Tracker Mortgages Website Advertising Latest Articles

COMPLAINT TO ADVERTISING STANDARDS AGENCY

I have just completed my online complaint to the ASA. It is a five step process. The basis of my complaint was targeted only at the statement of the West Brom website. My thinking is that if we over-complicate matters for the ASA they might decide to refer the complaint to the Financial Ombudsman or the FCA and we know know what a black hole those organisations can be. Therefore, focussing purely of the website advertising, and what I beleive to be a smoking gun case, will hopefully be useful for us to use as evidence in our main legal battle. Needless to say, it will also be a great annoyance to West Brom and very embarrassing for them if/when complaints are upheld.

If you want to do something similar and make a complaint of your own this is the link you will need to get you started >>> http://www.asa.org.uk/Consumers/How-to-complain.aspx

The first 4 steps of the complaint process are very simple to complete, it’s just your details and a few questions to answer regarding the basis of your complaint.

Step 5 of the complaint process is the meaty bit, i.e. the basis of complaint. Below (in this dark blue colour) is what I wrote …..

The West Bromwich Building Society website said

“Tracker mortgages give you the certainly of knowing that the rate you pay will move in line with Bank Base Rates”

I took this at face value, as it would appear 6,700 people who purchased this product did.

Bank Base Rates have not moved for nearly 5 years but West Bromwich Building Society have decided to increase the interest rate on my buy to let tracker mortgage by 1.9% as of 1st December 2013. Therefore, my complaint is the statement on the West Bromwich Building Society website was misleading. This is the sole purpose of my complaint to ASA at this stage.

For further information …..

West Bromwich Building Society are pointing to small print in their Mortgage Conditions to justify this increase and I am taking legal advice together with a large group of other affected borrowers about this. I also believe their mortgage documentation was misleading and that their hike in interest rates is not legal but that’s another story.

You may also wish to note that West Bromwich Building Society also believe they have the right to call in these mortgages within 28 days, even if their customer isn’t in default. They are actually using this as a veiled threat in response to complaints from their customers about the interest rate hike. The legal action group I am part of are also taking Counsels advice on this point as this appears to be out of sync with the rest of the mortgage market. Again there was not mention of this on their website or on their offer documentation. It was another clause buried into their mortgage conditions brochure.

I backed this up with the following link with an explanation that I took this screen shot from the West Brom website and now host the screen shot on my website as evidence for all to see. Link here >>> http://www.property118.com/wp-content/uploads/2013/09/West-Brom-Screen-Shot-21.png Complaint to ASA re West Brom Tracker Mortgages Website Advertising

Since making my complaint to the ASA I have gathered further evidence of the West Brom’s misleading financial promotions for their tracker rate mortgages which appeared on their website back in January 2008. This evidence was obtained via the “Wayback Machine” – see >>> http://web.archive.org/web/20070701010120/http://www.westbrom.co.uk/westbrom/mortgages.category?id=26

All comments via THE MAIN DISCUSSION THREAD PLEASE


Capita TDP to be taken over by MyDeposits Landlord News, Latest Articles

The Capita TDP (Tenancy Deposit Protection scheme) has been closed to accepting new deposits since the 14th of September this year.

Capita a corporate giant and FTSE 100 company was only awarded the contract by Government to operate the scheme from the 1st April 2013 (no pun intended) in an effort to increase competition and drive down costs for this service. Mydeposits has however stepped in to take over responsibility for Capita TDP protections in England & Wales after confirming their withdrawal from the market.

All of Capita TDP’s existing deposit protections will be automatically transferred to mydeposits from 1st December 2013. Landlords, agents and tenants in England &Wales will also have access to the scheme’s dispute resolution service. Capita TDP has now written to all existing members informing them of the news.

All transferred deposits will continue to be protected throughout the duration of the fixed term tenancy. my|deposits will also reissue a new Deposit Protection Certificate (DPC) and the relevant Information for Tenant’s leaflet for each protection.

Eddie Hooker, CEO of mydeposits, said: “Capita TDP’s existing landlord and agent members can rest assured they’re in safe hands with mydeposits. The experience and knowledge we derive from partnership with the both the National Landlords Association (NLA) and the UK Association of Letting Agents (UKALA) means we’re well placed to manage the handover following Capita’s withdrawal.”

“Landlords, agents and tenants will also have access to our free award-winning dispute resolution service, giving them peace of mind that the deposit will be returned fairly if they’re unable to reach an agreement over its return.”

“We’re on hand to speak to existing Capita members who have concerns regarding the transfer of their deposits. Landlords, agents and tenants can also visit our website www.mydeposits.co.uk where they can find details of the scheme and a range of useful guidance and advice on deposit protection issues”.Capita TDP


Tax Treatment of Equity Loans for Buy to Let Landlords Advice, Buy to Let News, Commercial Finance, Financial Advice, Landlord News, Latest Articles, Legal, Mortgage News, Property Investment Strategies, Tax and Accountancy, Tax News

I have been posting on numerous forums about the introduction of equity loans into the UK buy to let mortgage market, a common question is the tax treatment.

Equity loans do not attract interest in the normal way, there are no regular monthly payments. One UK lender, funded by USA equity house JC Flower & Co. (a leading financial services investment company with funds in excess of £5billion) has entered the UK market and others may follow. Their return on investment is earned when the loan term expires or or sale or refinance of the property, whichever is sooner. Their return is capital plus a share in capital appreciation equal to double their investment. For example, if they provide top up finance of 10% of a property value their return with be 20% of the increased capital value plus their investment when the funding is redeemed.

As you may know, I was previously a former commercial finance broker. When I was practising I was renowned for digging into complex funding, tax and legal structures to explore opportunities and threats which others may never have considered.

Note to all – I no longer provide advice and this post must not be treated as advice.

The tax treatment of the redemption of BTL equity loans will be very interesting.

Let’s use this example. Equity loans can sit over and above traditional interest bearing mortgages but for the sake of simplicity I have based the following example on equity funding only.

Property value at outset £100,000
Equity loan at outset £20,000

Property value at sale £200,000
Capital gain £100,000 (or is it and if so how is it shared? – see below)
Equity loan capital repaid £20,000
Profit on Equity loan to lender £40,000

Now does the £40,000 profit on the equity loan to the lender reduce the owners capital gain to £60,000 or is the owners gain still treated as £100,000?

The lender operating the first of these schemes has already stated they will bill their return as interest at the point of loan redemption. However, that’s not to say HMRC will see it that way, only time will tell. Therefore, my suggestion to all landlords considering this type of finance is to plan for the worst and hope for the best in terms of tax treatment. As has been proven many times, the law says you can call something pretty much whatever you like but case law or legislation will determine what it really is. Case in point, advance rent or deposit? – see Johnson vs Old

So will profits made by equity lenders need to be used to offset rental profits? If so there could be a substantial paper loss created in the year of redemption. Unused losses may be rolled forward, assuming losses are made, but such losses are only offsettable against future rental profits. No problem, in fact potentially very advantageous, IF you continue to make rental profits going forward. However, if this was your only property you may be stuffed by having to pay CGT on the full £100,000 of gain and not being able to utilise the carry forward losses. Note that rental losses can not be used to reduce other taxable income.

I can’t see HMRC allowing landlords to choose how they apply the lenders return to suit their individual circumstances, i.e. as either interest or a share of capital gain,  but we can live in hope, not that that’s a good strategy of course! If HMRC do allow a choice to be made that would be utopia from a tax planners perspective 🙂

What I would suggest to all considering equity loans is that they should plan for the worst case tax scenario and hope for the best case tax scenario. In other words, make decisions based on the worst case tax scenario and if that works then fine. Obviously there are many other aspects of the deal to consider too which is why I am an advocate of taking professional advice as opposed to taking a short sighted approach and simply jumping into deals unadvised just to save initial fees.

If you are a portfolio landlord who makes good rental profits then treating the lenders return as interest could be extremely tax advantageous if the tax regime remains as it is today. This is because income tax rates are greater than capital gains tax rates for higher rate tax payers.

Therefore, for landlords who will continue to make rental profits, post redemption of their equity loans, this is particularly attractive in my opinion. At worst, if HMRC decide to treat the lenders returns as capital gains, landlords will pay a lower CGT bill and not be able to offset interest. For a landlords with no ongoing rental profits post redemption of an equity loan, having the lenders return treated an interest charge is highly unlikely to be attractive whereas having the returns treated as capital gains will be far better for them.

If, of course, your equity loan is secured against your private home then no CGT is payable on sale anyway.

Tax Treatment of Equity Loans for Buy to Let Landlords

Tax is not the only consideration.

I have listed 11 good reasons for considering the product and 9 downsides in my main post about equity loans. That’s not to say that everybody should think equity loans are the best thing since sliced bread just because my list of pro’s and cons is 11 vs 9, it doesn’t work that way. The reasons for NOT doing something can be very different to reasons FOR doing something, they are not necessarily like for like considerations. For example, I also prefer a strategy of high gearing combined with high liquidity over a low gearing strategy because that’s what suits me and my attitude to risk. It does not mean that people who prefer a different strategy are either wrong or right, it just proves we are all different, hence we have other preferences such as careers, holidays, cars, films, food and where we live.

For further information and discussion about equity loans please CLICK HERE.


West Bromwich Tracker Rate Mortgages Legal Action Group Legal

West Brom Tracker MortgagesNearly 1,000 people have registered an interest in the Class Action groups challenging the legality of the increases to tracker mortgage interest rate margins proposed/implemented by West Bromwich and Bank of Ireland. Many of the people who have registered are not affected at this time but are sufficiently concerned about the potential knock on effects to the attitudes of other lenders to make a donation to the Class Action Marketing Fund. We must spread the word to ensure that we win these cases in order to to discourage other mortgage lenders from following suit. Tracker Rate Class Actions Updates

Funds raised towards the legal fighting fund are being held in a solicitors client account which complies fully with The Law Society rules and is protected by client money protection insurance and the solicitors compensation fund until they are billed.  The objective is to raise sufficient money to be in a position to fund group action court cases and associated legal expenses insurance. No court cases will begin until such time as sufficient funds are raised to protect and limit the liabilities of all participants to the amount of funds pledged up front. If Court cases are not required or are not affordable then any surplus funds held on account will be returned pro-rata to the members of each group.

The reasons we started this campaign are very simple:-

1) We believe the actions of West Brom are immoral

2) We believe the actions of West Brom are unlawful, i.e. they have no legal grounds to increase their tracker rate margins

3) We have no wish to subsidise other areas of the West Bromwich Building Society business model

4) We are fearful of other lenders following suit if West Brom are allowed to get away with this

On these grounds we have raised more than enough money to cover the initial legal work and the costs of obtaining Counsels opinion. In fact, even after taking these costs which amount to £15,000 out of the funds raised to date we are 25% towards our minimum target fund raising to commence litigation.

We will NOT settle on any basis.

In our opinion we are more likely to raise the required funds on this basis.

We have a moral duty to do what is right for those who support the values upon which this campaign was started. Our promise to all who support these values is that we will not sell out on you at any price. We will continue to fight this injustice and we will fight any other lender who tries to follow suit.

Are you with us?

To Do List

  • Complete the Class Action Expression of Interest Form – Link here You will then receive emails advising you what to do next.
  • Please make a donation to the marketing fund to help spread the word – link here
  • If your are directly affected then complain to your mortgage lender and copy in the Financial Ombudsman Service using this letter template

Latest media coverage in which our campaigns are named/linked

BBC Website

BBC TV News Channel “Your Money” (10 minutes and 18 seconds into the programme)

The Telegraph

iDoStuff

Guild of Residential Landlords

What Sam Saw Today – part One

What Sam Saw Today – part Two

House Selling Advice

Chesterfield Post

Also see our forums …

West Bromwich Building Society

Bank of Ireland

If you haven’t already signed up please complete the form below.

Tracker Rate Class Actions Updates


Tracker Rate Class Actions Updates Buy to Let News, Commercial Finance Broker Blog, Landlord News, Latest Articles, Mortgage News, Property Investment News, Property News

Over 1,000 people have registered an interest in the Class Action groups challenging the legality of the increases to tracker mortgage interest rate margins proposed/implemented by West Bromwich and Bank of Ireland. Many of the people who have registered are not affected at this time but are sufficiently concerned about the potential knock on effects to the attitudes of other lenders to make a donation to the Class Action Marketing Fund. We must spread the word to ensure that we win these cases in order to to discourage other mortgage lenders from following suit. Tracker Rate Class Actions Updates

Funds raised towards the legal fighting fund are being held in a solicitors client account which complies fully with The Law Society rules and is protected by client money protection insurance  and the solicitors compensation fund until they are billed.  The objective is to raise sufficient money to be in a position to fund group action court cases and associated legal expenses insurance. No court cases will begin until such time as sufficient funds are raised to protect and limit the liabilities of all participants to the amount of funds contributed up front. If Court cases are not required or are not affordable then any surplus funds held on account will be returned pro-rata to the members of each group.

Latest media coverage in which our campaigns are named/linked

BBC Website

BBC TV News Channel “Your Money” (10 minutes and 18 seconds into the programme)

The Telegraph

iDoStuff

Guild of Residential Landlords

What Sam Saw Today – part One

What Sam Saw Today – part Two

House Selling Advice

Chesterfield Post

Tracker Rate Class Actions Updates

Existing supporters of the Class Action campaign are to be congratulated for their efforts to date.

If you wish to get involved please see the To-Do list below.

  • Complete the Class Action Expression of Interest Form – Link here You will then receive emails advising you what to do next.
  • Please make a donation to the marketing fund to help spread the word – Link here
  • Complain to your lenders and copy in the Financial Ombudsman Service – letter template here
  • email watchdog@bbc.co.uk
  • Write to your local MP – find your local MP via this link several MP’s have already referred this matter to the chancellor of the exchequer or the chairman of the treasury select committee. The more support the better so we need everybody to write.
  • Contact your local newspapers – use this Press Release as a base and add your personal story as the media love case studies with local interest
  • Post articles linking back to Property118 on websites/blogs and post links in Facebook Groups and other online forums

West Bromwich BS Class Action Update

The reasons we started this campaign are very simple:-

1) We believe the actions of West Brom are immoral

2) We believe the actions of West Brom are unlawful, i.e. they have no legal grounds to increase their tracker rate margins

3) We have no wish to subsidise other areas of the West Bromwich Building Society business model

4) We are fearful of other lenders following suit if West Brom are allowed to get away with this

On these grounds we have raised more than enough money to cover the initial legal work and the costs of obtaining Counsels opinion. In fact, after taking these costs out of the funds raised to date we are 27% towards our minimum target fund raising to commence litigation. Now I don’t know about you but if Counsels opinion is that we have a VERY strong case I would definitely consider paying a lot more than I’ve paid already to take this all the way. £240 a case is a tiny fraction of what we all stand to lose, not just in terms of this lender but possibly others too.

In a months time we will have Counsels opinion. These are the scenario’s I have considered.

1) Worst case scenario is that we will be advised that we do not have a case. If that happens, costs to date will be taken from the funds raised and we will all get a refund pro-rata.

2) We are advised that we have a good case but we do not have enough money in the pot to fight it. We will then have to set a closing date for the fund and have a vote amongst members on how much they are prepared to pay if necessary. I suggest a pledge of up to one years worth of savings because if we start trying to set amounts we could be going back and forth forever more if people decide they are are in at one level and out at another. If we still don’t have enough money pledged at the end of such an exercise then it’s possibly game over, i.e. contributions are refunded net of expenses to all named borrowers.

3) We have enough money in the pot and counsels opinion is that we should fight.

We will NOT settle on any basis.

In our opinion, we are more likely to raise the required funds on this basis.

We have a moral duty to do what is right for those who support the values upon which we started this campaign in the first place. Our promise to all who support these values is that we will not sell out on you at any price. We will continue to fight this injustice and we will fight any other lender who tries to follow suit.

Who’s with me?

West Bromwich Legal Action So Far

Tracker Rate Mortgage Class Actions UpdatesWe appointed solicitors to consider the actions of the West Bromwich BS tracker mortgage hike in interest rate margins at the beginning of October. Well over 100 affected borrowers have sent their papers and fees to the solicitor representing the group.

The solicitor acting for the group has been asked NOT to commit chargeable time to respond to individual telephone calls and emails from affected borrowers, this is to preserve funds. All questions should be raised via the Property118 forums to prevent duplication of efforts.

Around £15,000 of the funds raised to date will be used to complete the following steps. The balance will be held towards a Court action fighting fund, the target for which is £100,000 plus.

  1. To seek counsels opinion on the legality of the actions of West Bromwich and to seek advice on the most direct legal options to pursue. The solicitor acting for the group has appointed one of the UK’s leading banking barristers at Stone Buildings London
  2. The solicitor acting will provide template letters for all paid up members to send to the solicitors who acted in the transaction. This letter will advise the solicitors to put their PI insurers on notice and also ask the solicitors to comment on why they did not offer advice on the clauses now being used by West Bromwich BS.
  3. A further template letter for affected borrowers to submit as a follow up to initial complaints to the Financial Ombudsman service will also be prepared by the solicitors acting for the group and will be based on counsels opinion. There is no rush to do this, we have up to six months, hence the decision to await Counsels opinion in respect of the best possible legal arguments to present.
  4. The solicitor acting on behalf of the group has already sent  a letter to Andrew Tyrie MP, Chairman of the Treasury Select Committee. A response is awaited.
  5. The solicitor acting on behalf of the group will submit formal complaints to the Financial Conduct Authority and the Financial Ombudsman Service once Counsels opinion has been received. A further complaint may be submitted to the Advertising Standards Authority dependent upon counsels advice.

Bank of Ireland Class Action Update

More pressure needs to be put on the Financial Conduct Authority to obtain their own independent advice as to the legality of the actions already implemented by the Bank of Ireland.  They received our barristers opinion, sent it to BoI who obtained comment from their QC and then decided to do nothing further. Our solicitor is of the opinion that the FCA response was a “whitewash” as they did not seek their own independent advice prior to making a decision. The more noise we can make about this the better as we need them to reconsider their position. Pressure is intensifying from the Treasury Select committee to lean on the FCA as more MP’s get embroiled in the debate following complaints from their constituents. Fundraising will recommence in due course, in the meantime, a QC working at the same chambers as the barrister we instructed has volunteered to review the opinion of our barrister and the responses from the FCA and the Bank of Ireland.

Fees applicable to the Bank of Ireland Class action are likely to be £240 per property, less any fees paid to date. We will advise you when the fundraising re-commences. Our objective is to significantly increase the numbers of interested parties before fund raising recommences. We are quietly confident that the promotional activities described in this update article will increase the numbers of interested participants.

The Financial Ombudsman Service are yet to make a decision based on the formal complaint regarding the actions of Bank of Ireland. It has been 7 months now since the FOS opened this case and their are still pontificating how to deal with it. If you believe this is an unacceptable delay the address to write to is The Financial Ombudsman Service, South Quay Plaza, 183 Marsh Wall, London E14 9SR.

In both cases

Preference remains to persuade a regulator to take the cases to Court as this will significantly reduce costs to affected borrowers.

Disclosure – in group legal action cases it is normal for both sides to be aware of each others legal arguments before a Court case commences. Therefore, there is no risk to debating legal points in open forum. There is, however, a positive upside in that it continues to provide media with new stories and people to contact for case studies. Exposure is what we need to build the group.

The Marketing Fund

The purpose of the marketing fund is to increase awareness of the campaign. This fund is held separately to the Class Action legal fighting fund which is held in a solicitors client account protected by client money protection insurance. The marketing fund is administered by Innovative Landlord Solutions LLP which is the owner of Property118.com.

Initiatives funded so far include sending letters to a database of mortgage brokers and financial advisers. The database was rented from Equifax and we chose to send letters as opposed to emails in order to guarantee delivery. We have also completed significant Search Engine Optimisation to make it easier for people surfing the internet to learn about our campaigns.

A Press Conference, open to paid up members of the Class action Group, and those who have contributed to the marketing fund, will be organised shortly after we have receive Counsels opinion on the West Brom case and the QC’s opinion in respect of our submission of the BoI case to the FCA, their response and the BoI’s QC’s response to the FCA. All responses are anticipated to be received towards the end of November with the Press Conference being held in London shortly thereafter. Surplus funds in the marketing fund, which are still continuing to flow in nicely, are being held towards this event. Funds raised since our first call for donations to a Marketing Fund on 3rd October are now approaching £4,000 of which £3,375 has been utilised to date.

Facebook Marketing

We have done some research and we are able to contact in the region of 230,000 to 420,000 people via Facebook for a budget of £800. These will be friends of friends of people who have “Liked” the Property118 Facebook page. On the basis that people socialise with like minded people this could be an excellent target audience.

Details via this link >>> http://www.property118.com/wp-content/uploads/2013/10/Facebook-Promo.png

The beauty of this type of advertising is that we can add credit to reach more people as and when we receive donations.

If you wish to donate to the the fund please see >>> http://www.property118.com/much-appreciated/ and send us an email to let us know that you wish the funds you have donated to be used to fund Facebook marketing. The email address to write to is mark@property118.com

All comments via the main discussion threads please.

Bank of Ireland

West Bromwich Building Society

If you haven’t already signed up please completed the form below.


Calling all Wikipedians Latest Articles

Neither Property118 nor myself have a page on Wikipedia and that makes me 🙁

Can you help?

I understand that other people have to compile the page and the more input the better?  Calling all Wikipedians

If this is the case I suggest the following as a starting point.

Property118 forum

An online forum and news feed with a mission to facilitate the sharing of best practice amongst UK landlords and letting agents.

Founders of The GOOD Landlords Campaign.

Funded entirely by sponsorships and donations.

Google News Publisher.

Claims to have nearly 200,000 subscribers to its weekly newsletters.

Founded by Mark Alexander – Twitter handle @iAmAlandlord


Tracker Mortgages Press Release Buy to Let News, Landlord News, Latest Articles

We are encouraging everybody who has registered for the Tracker Mortgage Class Action campaign to contact their local press with a copy of the Press Release below. Please copy/paste into an email, send it to your local Newspaper and follow up with a call to their financial editor.

Tracker Mortgages Press Release

PRESS RELEASE

Local landlords have been shocked by a bombshell letter received from lender West Bromwich Building Society which has doubled their mortgage payments almost overnight.

Buy-to-let borrowers with three properties or more have been targeted by West Brom to bail out their balance sheet by increasing their tracker mortgage rate – in direct contradiction to the terms of the mortgage offer signed by the landlords.

The building society has engaged a team of lawyers to scour the small print of a booklet issued with the original mortgage offer and is using a well-hidden clause to justify the increase, based on a rationale of “prudence and efficiency”.

Borrowers are furious as their tracker mortgages, promised to track at 0.99% above base rate have been increased by 2% with effect from the beginning of December. The rise will add between £200-£400 to the average monthly mortgage payments, inevitably forcing rent rises as leases are renewed.

As anger grows amongst the 6,700 affected borrowers, a legal campaign is already well in hand. Solicitor Justin Selig of The Law Department says, “I have had a look at the paperwork and there doesn’t seem to be any reference to the ability to increase the margin, so I don’t know how they think they can get away with it. This is definitely worth fighting.”

Mark Alexander of the Property118 landlords forum is co-ordinating the campaign and says, “Whether you are a client of West Brom, Bank of Ireland (which has also done the same) or indeed you have a tracker mortgage elsewhere you need to help fight this case. Your tracker mortgages may not be with West Brom or Bank of Ireland, however, that does not mean that you are safe. You may be OK today but what about next week, next month or next year?”

The Property118 forum is raising a fighting fund to take a Class Action Lawsuit to the courts. Currently nearly 700 people have committed. A template complaint letter to the building society and financial ombudsman is also available on the website.

 


Tenants Charter – Mr Pickles, have you gone completely mad? Buy to Let News, Landlord News, Latest Articles, Legal, Property Investment News, Property Market News, Property News, Tenant Eviction

Tenants Charter

Open Letter to Mr Eric Pickles – Communities Secretary – re Tenants Charter

Dear Mr Pickles

Have you gone completely mad?

I am reading in The Times Newspaper today that you are to announce a “Tenants Charter” which will allow tenants to demand two to five year tenancy agreements.

Do you realise that most buy to let mortgage borrowers would be in default of their mortgage contracts if they were to offer tenancy agreements with fixed terms longer than 6 or 12 months?

Do you realise that most modern leases (e.g leasehold flats) contain conditions on subletting not exceeding 12 months in term?

There is a very good reason why mortgage lenders have these conditions in their mortgages. It is because it is so difficult to obtain possession when a tenant reneges on a contract. Bad payers are regularly getting away with up to 5 months of rent free living. Theoretically a landlord can apply to obtain possession by serving two weeks notice once a tenant is two or months in arrears on rent. However, after that 10 weeks has expired it can take several months to get a Court date. Even when a possession order has been granted it then takes several more weeks before bailiffs can be appointed to enforce the order. If you want landlords and mortgage lenders to provide greater security of tenure to tenants then you are going to have to sort out the possession rules for landlords first.

Section 21 of the housing act transformed the UK Private Rented Sector which was in rapid decline until the 1988 act was introduced. Forcing landlords to offer long term tenancy agreements will force the PRS back into the dark ages and reduce incentive for further investment into the sector.

Does Government not recognise the need for a healthy PRS?

Does government not realise that a huge sector of the working population rely on the housing flexibility the PRS provides in terms of job mobility?

Do you have any idea of how your speech today could destabilise the Private Rented Sector?

I totally understand that good tenants, particularly young families with children of school age, need a fair deal and it cuts both ways in that most landlords want good tenants to stay long term. It makes economic sense for landlords to have quality long term tenants,

So why have you not even considered promoting the Deed of Assurance?

Perhaps you are unaware of the effectiveness and simplicity?

A Deed of Assurance is a document in which a landlord promises to pay an agreed level of compensation to a tenant if possession is obtained within a given time period. 

A Deed of Assurance is a relatively simple legal agreement which sits alongside an Assured Shorthold Tenancy Agreement “AST”. It is a separate agreement between landlord and tenant which does not affect the landlords rights to serve notice or to obtain possession, therefore it does not affect the rights of a mortgage lender either. However, it does offer tenants peace of mind.

From a tenants point of view, a Deed of Assurance provides far more flexibility than a long term tenancy because they are only tied in for 6 months and can then move on if they need to. What a Deed of Assurance offers in addition to an AST is peace of mind.

The compensation amount offered by the landlord is negotiable but obviously the idea is to agree something which is meaningful to both parties. For example, I offer to pay anything between £1,000 and £5,000 compensation if I obtain possession within the agreed period, providing the tenancy conditions have been observed impeccably by the tenant of course. If tenants fail to pay rent on time or breaches other contractual terms within the tenancy agreement their right to claim compensation for being evicted during the Deed of Assurance is forfeited. I have been offering a Deed of Assurance to my tenants for a few years now and I am delighted to report that my relationships with new tenants have never been better.

I do not expect a reply from you Mr Pickles but I do hope you will consider the implications of acting on the advice of the people who have been influencing you up to this point.

Yours sincerely

 

Mark Alexander


West Bromwich Building Society Tracker Margins Legal Action Advice, Financial Advice, Landlord News, Latest Articles, Legal, Mortgage News, Property Investment News, Property News, Property118 News

West Bromwich Tracker Rate Mortgages Legal Action Group

West Bromwich Building Society Tracker Margins Legal Action

Are you affected by the West Brom Tracker Rate Hike?

If your mortgage account number begins with the number 8 you are highly likely to be one of the unlucky 41% of the mortgage customers of the West Bromwich building Society with a West Bromwich Mortgage Company account affected by the 1.9% increase in your tracker margin rate. However, if you arranged your mortgage directly with West Bromwich Building Society (i.e. not via a broker) or before 2006 the chances are that your account number will begin with the number 9 and you are not affected – YET!!! West Brom will give no assurances that mortgages with account numbers beginning with the number 9 will not be affected at some point in the future.

OUR INTENDED CLASS ACTION LITIGATION OVERVIEW

Tracker Rate Class Actions Updates

The reasons we started this campaign are very simple:-

1) We believe the actions of West Brom are immoral

2) We believe the actions of West Brom are unlawful, i.e. they have no legal grounds to increase their tracker rate margins

3) We have no wish to subsidise other areas of the West Bromwich Building Society business model

4) We are fearful of other lenders following suit if West Brom are allowed to get away with this

Mark Smith (Barrister-At-Law) said …

“Representative actions, where one person starts a case representing many others, who all want the answer to a legal question from a court such as ‘is this contract enforceable against me?’ but are not seeking damages. All those who sign up to the action will get the benefit of the win, but they do not have to start their own cases, as they are ‘represented’ by the lead claimant.

The only people who will definitely benefit from success in the case are those who have signed up. There will be no free rides. Any others will have to fight their own corners individually, either alone or with legal help (which will inevitably cost significantly more than the group case).”

We will NOT settle on any basis.

Landlords take legal action against West Brom Mortgage Company

We have a moral duty to do what is right for those who support the values upon which this campaign was started. Our promise to all who support these values is that we will not sell out on you at any price. We will continue to fight this injustice and we will fight any other lender who tries to follow suit.

Are you with us?

This discussion thread is now closed – we’re off to Court!

To link to the new discussion please CLICK HERE

West Bromwich Mortgage Company Tracker Margins Legal Action


Tracker Mortgage Class Action Update Latest Articles

Tracker Mortgage Class Action Update

630 people have completed our Tracker Rate Class Action Registration Form as I type this update. 

Of those, 300 had signed up to the Bank of Ireland Class Action campaign which we started in early March 2013. The remaining 330 have signed up in the last week since the announcement from the West Bromwich Building Society that 6,700 landlords will have their tracker margins increased by 2% on 1st December 2013.

Our campaigns were referenced in The Telegraph on Saturday and The Sunday Times yesterday. We have also been referenced in several blogs and Facebook groups.

I came in this morning to a very full inbox and whilst I have endeavoured to reply to everybody, please excuse the brevity of my responses if you are one of the people who contacted me, I’m sure you will understand.

The complaint letter template has been well received and I’m hoping that West Brom will have a very heavy mailbag this morning and for the foreseeable future.

On Twitter, a hashtag is being used to drive interest, it is #MortgageMugging – I didn’t create the hashtag but it does explain how we many of us feel to let’s all use it. We are asking Twitter users to visit the hashtag regularly and to re-tweet all relevant tweets posted by others.

I had a long telephone conversation with Justin Selig this morning in which I explained that we have gained some momentum but my fear is that we could lose that if people don’t have clear direction and a very good reason to sign up and pay up now.

My biggest question at the moment is this;

What is the “early bird” incentive for people to commit to fund raising?

If all affected borrowers benefit equally, whether they have contributed or not, then human nature will more often than not be to do nothing. I suspect this is what the lenders are relying upon and it is my biggest fear.

Litigation isn’t going to be cheap and it appears I may well have significantly under-estimated costs when I predicted that we will need to raise around £100,000. The cases have similarities but they are not the same, therefore we could be fighting two separate Class Action cases. It is still unclear whether one test case case against each lender is the way to go or whether we should bring one case against each bank to represent all affected members of each Class Action.

The reality is, we need further advice from Counsel, however, bearing in mind that only £10,000 was raised to fund the initial campaign we have made very good progress so far.

We have a barristers opinion on the BoI case and we also know where we stand with the FCA having placed Counsels 32 page report in front of them outlining the legal bases of our grievances. We have not yet had a response from the FOS but I don’t think we should be holding our breath on that one.

During our conversation Justin and I agreed that we should seek further advice from Counsel on what we should do next. As I expected, Justin was a step ahead of me and reported that a QC in the same chambers as our barrister has agreed to provide further opinion free of charge! I have no idea how Justin pulled that one off but we all owe them both a debt of gratitude for that.

Once we have the responses from Counsel Justin will be in a position to seek quotes for legal fees insurance. That will give us a much clearer indication as to how much money we will need to raise.

I have also asked Justin;

Is there a way to ensure that only those who contribute to the fundraising will benefit? If so, could the fund raising be phased to give ‘early birds’ an incentive, e.g. first 300 in pay X, next 300 in pay Y, everybody after that pays Z?

We don’t know how much we need to raise because we don’t yet know what we are going to do next. We need to be clear about this before we recommence fund raising. What we do know is that we need to obtain Counsels opinion on the West Bromwich Building Society case and advice from the barrister on how to proceed, this will cost around £4,000.

Specifically in relation to the West Bromwich case we need to know,

  • What is counsels opinion of the legality of the proposed actions by West Bromwich BS?
  • What constitutes a professional investor? The case of the OFT vs Foxtons was unclear but West Bromwich have decided that it is anybody with three or more mortgages. What is the legal relevance of this?
  • Can we get an injunction to delay the increase pending a Court Case? If so what’s the cost?
  • Can/should affected borrowers use the Small Claims Court to make claims for breach of contract? If so, what do they need to do? Could an advice pack be created and sold to raise funds?
  • Should affected borrowers write to their solicitors asking them to comment on the advice (or lack of it) they provided at the time at the time of arranging the mortgage(s). Should these solicitors be advised to put their PI insurers on notice? If so we need letter templates. Could these be included in the same advice pack?

I am also concerned about what happens if we have a further round of fund raising for either case and we don’t raise enough money to take the case through to its final conclusion. What should we do about getting started and/or refunding money paid? It’s a ‘chicken and egg’ scenario because logic suggests that more people will join the fight once it gets started properly and media coverage increases, but to what extent? Do we commence proceedings against Bank of Ireland and/or west Bromwich BS and effectively gamble on more people signing up? If they don’t, and we exhaust all of the funds raised, what then?

Do we use new money raised to put more pressure on the FCA? For example, we could instruct Justin to engage Counsel with a view to writing a response to the FCA expressing our concerns that firstly they are not taking an impartial view of this and secondly, contrary to what they reported earlier in the year to Andrew Tyrie MP, this is not an isolated incident and could potentially cause carnage if other larger lenders follow suit. My opinion is that the FCA’s response is a whitewash.  They have simply used the BoI response to our case as a reason not to pursue it.  They have not obtained their own independent advice so the FCA is not acting as an independent arbitrator.  The BoI response is a note from their barrister who they asked to find ways round our argument.  It is not an independent review of the actions of BoI. The FCA has not given us a chance to respond to the BOI arguments. They have simply taken the BoI version and gone with it.  My own gut feeling is that we should press this issue and seek support from Andrew Tyrie MP because he clearly thinks the actions of BoI were unfair and is therefore likely to feel the same way about the actions of West Bromwich BS.

The above really is the tip of the iceberg in terms of the many questions and concerns I have at this stage. However, it is important for everybody to know what we are up to behind the scenes.

The bottom line is that we are going to need a lot more support whatever happens. Therefore, I am asking everybody who has registered to date to persuade at least two more people to register for the Class Action in the next week and then get them to do the same. By the time that’s done, Justin should have more answers for us from Counsel and the direction we need to head in should be far more clear to us all.


ACT NOW to protect the margin on your YOUR tracker mortgage Advice, Buy to Let News, Cautionary Tales, Financial Advice, GOOD Landlords Campaign Sponsors, Landlord News, Landlords Stories, Latest Articles, Legal, Press, Property Market News, Property News

Help us to protect YOUR tracker marginsIf you have a tracker mortgage you may be forgiven for thinking that your mortgage payments will only change when the base rate changes. 

Just suppose you open your post one day to find that your mortgage lender has decided to increase the tracker margin by a couple of percent!

Sounds unimaginable doesn’t it?

Well it isn’t, and you could be next!

This shocking news was recently delivered to 6,700 customers of the West Bromwich Building Society. What’s more, this is not something new, 13,500 Bristol & West and Bank of Ireland Mortgages customers received exactly the same treatment in February 2013.

Outraged? Their customers certainly were!

Could you be next???

West Brom stand to make an extra 19 million pounds a year if they get away with this. How much will your mortgage lender stand to make when they decide to do the same thing? It’s a big incentive for them isn’t it, especially if they think they are unlikely to be challenged due to the inability of landlords to raise the required funds to put up a fight.

If a group of named landlords decides to fight this in Court the claims will typically be for the value of the increase over the remaining term of the mortgage. By way of example, if your mortgage increases by £150 a month and you have 18 years to run on your mortgage your claim for damages would be £32,400.

We need to raise awareness if we are to raise the money to fight the test case

There are 6,700 affected borrowers with West Bromwich Building Society and a further 13,300 affected by bank of Ireland already. However, that doesn’t mean raising the required level of funding will be an easy task to achieve. Many of these people will never get to hear about this campaign and that’s where you come in. You may or may not be affected today but what about next week, next month or next year? To discourage your lender to follow the lead of WBBS and BoI and increasing your tracker margins we need to convince them they will have a fight on their hands if they do! Knowledge of our intentions will also act as a deterrent to other mortgage lenders due to the huge commercial risks associated with the potential for thousands of compensation claims running into hundreds of millions.

YOU can make a difference

Whether you are directly affected now or not, we urge you to help promote this campaign. The sooner we can raise enough interest, the sooner we can raise the money to commence litigation and stop this profiteering in its tracks. Please talk to your friends about this campaign and ask them to sign up. Please email a link to this discussion, share it on your Facebook, Tweet it, blog about it, post links on forums – SHOUT IT FROM THE ROOFTOPS!

Your wealth is at risk if you choose to ignore this message!

Please get involved and support this campaign by completing the form below.


Rent Controls – London vs the rest of the world Latest Articles

A Landlord Today article this morning says David Orr of NHF (trade body for social landlords) thinks Govt should introduce Rent Controls.

Luckily the RLA have swiftly responded, saying “His calls for rent controls are based largely on a select few areas of London boroughs that have seen rents rise as a result of an acute housing shortage across all tenures.”

I’ve posted 2 comments on news articles today (the other was about the reported massive continuing rises in rents – until the last sentence, which then said actually it’s not quite the same around the rest of the country). I think the regional picture (which is turn is swayed again by higher levels of demand in the university cities) is hugely different!

What’s your experience? Have you managed rent increases, or are you starting to have more voids now? (an idea of what type of location your properties are based in would be useful to know too, if you are commenting). I’m certainly hearing more of that from around the ‘regions’ and this London story just doesn’t make sense elsewhere. Rent Controls - London vs the rest of the world


Letting Agent renewed boiler without telling me! Latest Articles

I am a long-time reader (and I suppose a ‘silent supporter’) of property118.com (and previous Money Centre client) having been a landlord since 2004. I have three properties which I rent out, one of which I manage myself, the other two are with two different letting agents. This is, however, the first time I have posted anything on the site

This isn’t a particularly complicated issue to explain, basically I got a phone call a few weeks ago from the letting agent for a flat I have in Glasgow, which is a one bedroom flat built in 2007, telling me the client had reported that there was no hot water. They asked me if I wanted to deal with this myself, or if I wanted them to go ahead and get someone out to see what the problem was. Wanting to minimise the inconvenience to my perfectly good tenants, I told the agent to go ahead and get an engineer out, and then heard nothing further about the matter. I assumed that it had probably been a straightforward repair on a six year old boiler (which had previously been completely trouble-free), and in my mind I was expecting a charge of maybe £100 or so to appear on my statement. Letting Agent renewed boiler without telling me

This morning in the post my monthly statement arrived, and I was stunned and angered to see an entry relating to a replacement (new) boiler, at a cost of £566! Although that doesn’t sound particularly expensive to me for a boiler, my concerns are numerous:

Was the problem really so bad on a six year old boiler that it needed replaced? If I had known I’d have got a second opinion at the very least! I may have had some recourse to go back to the builder (for example) I bought the property from.

Why was I not informed that the boiler was condemned? I would have thought this is a fairly major event.

Even if this was the only course of action available, why was I not given the opportunity to have any input into which new boiler was fitted? (after all, I am paying for it as it stands)

I simply cannot believe the complete lack of communication from my letting agent over this, and wondered if any members here had had any similar experiences, or could offer any professional (legal?) advice, please. The way I am feeling as I type this, I feel I should not have to pay for this new boiler at all, given the appalling way the matter has been handled, although perhaps this is a little extreme and just my state of shock at today’s news.

Thanks in advance for any help given.

Regards

Gary


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