20:21 PM, 19th January 2015, About 7 years ago 124

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#WestBromTrackerMark Smith, Head of Chambers at Cotswold Barristers will be representing landlords at the Commercial Court at Rolls Building, Fetter Lane, London this Wednesday in the UK’s largest ever direct access legal case. #WestBromTracker

We will be tweeting under hashtag #WestBromTracker so please feel to join in the discussion on Twitter and re-tweet. You may also wish to use hashtags such as #mortgage #news and #media but #WestBromTracker is the essential one.

Please wish us luck because this really is a David and Goliath fight. The people affected by these tracker rate margin hikes trusted their mortgage lenders to treat them fairly. Via Property118 a group has managed to raise over £500,000 to have a case against the West Bromwich Mortgage Company (a wholy owned subsidiary of West Bromwich Building Society) tested in Court. The funds raised to fight the case have not come from the super rich, they’ve been contributed by hard working folk who chose to invest their hard earned savings into providing much needed rental property. They trusted the building society to honour the mortgage deal they signed up to but sadly this trust has been broken. 

The Bank of Ireland, Manchester Building Society, Skipton Building Society and their wholly owned subsidiary AmberHomeloans have previously got away with similar rate-hike shenanigans but it is not too late for affected borrowers to take action. Hopefully a win on Wednesday 21st January will discourage other mortgage lenders from tinkering with tracker rate mortgage margins in the future and will also inspire borrowers affected by similar rate hikes to fund legal action against those mortgage lenders too.

Trading Standards, the Advertising Standards Association and the FCA all refused to get involved in the dispute. The Financial Ombudsman Service appear to have chosen to ignore all contractual legal arguments and to make very strange decisions in all complaints regarding actions of mortgage lenders in respect of hiking interest rates when their sales pitch clearly linked rates to a transparent pricing structure.

Watch this space and please feel free to post comments.


  • Before the credit crunch tracker mortgages were incredibly popular, there are an estimated 1 million tracker rate mortgages in the UK, many of which are secured against peoples own homes
  • Tracker rate mortgages are intended to provide transparent pricing. The rate of interest is directly linked to the Bank of England base rate plus an agreed margin for an agreed period of time, in many cases for the lifetime of the loan.
  • Some unscrupulous lenders have increased the margin charged over the base rate and this has been the basis of our legal argument against the West Bromwich Building Society, i.e. the contract did not allow for this to happen.
  • Some peoples mortgage payments have more than doubled despite the base rate not having moved for nearly six years.
  • Hikes in tracker rate margins haven’t only affected landlords
  • In 2013 Bank of Ireland increased the margins on over 15,000 tracker rate mortgages, those affected were both homeowners and people who had taken buy to let mortgages in order to buy properties as investments to provide for their retirement. To date, insufficient funds have been raised to take this case to Court.
  • People naturally tighten their purse strings when their mortgage costs increase and many have expected regulators to step in and help them. Sadly the regulators’ appetite to take on the banks and building societies who have breached their mortgage terms by increasing their tracker rate mortgage margins has been none existent. That’s why Court action has been so necessary.
  • If every affected person had committed just £500 to fight for their rights in Court this sharp practice from mortgage lenders would have been nipped in the bud a long time ago.
  • In 2010 Skipton Building Society and their wholly owned subsidiary Amber Homeloans removed a contracted interest rate cap from their mortgages which had a similar effect of massively increasing the mortgage payments of a reported 80,000 borrowers. The interest rate cap, which was linked to the bank base rate, was removed despite public announcements from their CEO less than a year before that contractual arrangements would be honoured. A case has never been taken to Court due to lack of financial commitment from affected borrowers. more about the Skipton Building Society rate hike and links to source information here >>> http://www.property118.com/skipton-building-society-legal-action/64751/
  • Both Property118 and Cotswold Barristers are keen to pursue legal action against Skipton Building Society and the Bank of Ireland if public interest in doing so is sufficiently high and subject to the required level of funding being attained.
  • The required level of financial commitment to take on the other offending lenders would be circa 2,000 borrowers each committing around £500.


by Appalled Landlord

9:32 AM, 22nd January 2015, About 7 years ago

Did Raymond Cox QC really say that the building society’s right to vary the interest rate ‘was repeatedly made clear in the documents sent to Mr Alexander’?.

I ask this because it is simply not true. The documents repeatedly made clear that the rate could only change if the Bank of England changed its Base Rate, and by exactly the same amount.

The documents never once “made clear the building society’s right to vary the interest rate”. If they had done so, we would have realised that the loan was not the tracker they were promoting so hard, but was in fact a standard variable loan that we would have run a mile from.

by Appalled Landlord

10:05 AM, 22nd January 2015, About 7 years ago

According to the Daily Mail article:
“ Mark Smith, representing the claimants, warned: ‘They are saying they can just move the rate to make themselves solvent, and residential mortgages will be next.’
But the building society said consumers were not subject to the same terms and conditions and insisted this would not happen.”

This is also not true. All of the building society’s borrowers are subject to exactly the same terms and conditions. The reason that the building society has breached its contract only with us is that we are not protected by the Financial Services Authority. It is scandalous that the FSA has allowed the building society to do to us what it would not allow in the case of “consumers”.

by Mark Alexander

10:23 AM, 22nd January 2015, About 7 years ago

Reply to the comment left by "Appalled Landlord" at "22/01/2015 - 10:05":

There is no case law to suggest that we are not consumers either. However, that wasn't the basis of our legal argument at this stage due to cost implications. OFT vs Foxtons makes it very clear that landlords can be consumers but sadly the ruling does not define when a landlord ceases to be a consumer. West Brom were flying a kite on that point at best.

Also, their submissions to the Court, orally and verbally, made it very clear that they only targeted people with three or more properties to avoid consumer contract regulations. I take this to mean they accept that their action are unfair!

by Mark Smith (Barrister-At-Law)

10:30 AM, 22nd January 2015, About 7 years ago

The issue of 'consumers' could not have been addressed in this case, as each of the parties would have to be considered individually, and so this point could not be considered as part of the representative action.

That is not to say it could not be considered in 6250 individual cases.

I will be writing a circular secure email to each represented person later today.

Mark S

by Monty Bodkin

10:46 AM, 22nd January 2015, About 7 years ago

Reply to the comment left by "Appalled Landlord" at "22/01/2015 - 09:32":

I don't think he is referring to the initial documentation but to letters sent subsequently informing of the interest rate rise.
-Which is not what is being disputed but it helps with the smokescreen that they have acted fairly.

by Appalled Landlord

11:21 AM, 22nd January 2015, About 7 years ago

Reply to the comment left by "Monty Bodkin" at "22/01/2015 - 10:46":

But letters sent after we entered into the contract are not relevant.

by Appalled Landlord

11:35 AM, 22nd January 2015, About 7 years ago

Reply to the comment left by "Appalled Landlord" at "22/01/2015 - 11:21":

In any case, letters informing us of changes to our tracker rates never said that WB had the right to change the rate independently of the Bank of England.

Sometimes these letters also informed us of simultaneous changes, by a different amount, to WB’s SVR loans, thus confirming the distinction from our tracker loans.

by Monty Bodkin

12:10 PM, 22nd January 2015, About 7 years ago

Reply to the comment left by "Appalled Landlord" at "22/01/2015 - 11:21":

But letters sent after we entered into the contract are not relevant.

I agree.

by Graham Durkin

12:50 PM, 22nd January 2015, About 7 years ago

i wish I could have attended yesterday and i must say it was just as nervous watching this post site through the day wishing for a further comment.could I ask whether the latin term contra !!! that MARK A spoke about many months ago had any relevance to our defence yesterday and also the comments of lord Hoffman in the case of the Iinvestors group that won a case against the WEST BROM a couple of years ago. Whats so galling about this matter is that TRACKER MORTGAGES have been around for many years and most LENDERS have similar sets of terms & conditions and never saw fit to impose further penalties on its borrowers. We derserve justice in this matter and I THE JUDGE can see this contract for what it was ORIGINALLY intended for and not as the WEST BROM see it due to the FINANCIAL DOWNTURN in this sector..

by Mark Alexander

13:27 PM, 22nd January 2015, About 7 years ago

On advice from Mark Smith I have deleted two posts in relation to legal tactics, one of which was written by myself.

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