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 The Man From Nowhere

13:30 PM, 22nd January 2015, About 7 years ago

Reply to the comment left by "graham durkin" at "22/01/2015 - 12:50":

ICS v West Bromwich BS is the foundation of construction (no pun intended) when construing contracts and every judge in commercial sphere is aware of it. Lord Hoffman is almost singlehandedly responsible for the rules of construction used in interpretating contracts. He also pretty much wrote the book on implying terms in contracts in AG Belize v Belize Telecom ltd [2009].

Contra proferentem is such a well known rule that it too rarely needs to be explicitly stated.

by Mark Alexander

15:41 PM, 22nd January 2015, About 7 years ago

Reply to the comment left by "Chris Novice Shark Bait" at "22/01/2015 - 15:10":

Tweet just received from our favourite journalist, Nicole Blackmore from The Telegraph

by Incensed Landlord

15:59 PM, 22nd January 2015, About 7 years ago

Reply to the comment left by "Mark Alexander" at "22/01/2015 - 15:41":

Hi Mark, and a big WELL DONE on all your hard work, together with Mark Smith barrister. Just wish I was able to have attended the hearing. Anyway I'm nonetheless of course supporting as best I can in other ways.

I have seen and already read The Telegraph article, before it was posted up here; and I have one question (which I have raised directly on The Telegraph comments section):

I find it interesting that WBBS said it 'securitised its mortgages', as lenders MUST first secure consent from their borrowers if they wish to securitise mortgages (at least that's the case in South Africa). One wonders if in fact that same rule applies in the UK, as if it does, then there are legal ramifications to this which throws up a whole new set of legal challenges. WBBS did not first request permission to do this, so this is either legal and above board, or it isn't, in which case surely some serious questions need to be raised with them?

Is this something, or an avenue which will in any way weaken the WBBS position? I know the judge is now considering matters, but meanwhile IF this is something that is relevant, then perhaps it might be used against WBBS. But as I say, it's not something I'm sure applies here in the UK, but if it does, and we DID lose our case, then perhaps this might be something to consider when appealing? This would then really throw WBBS to the lions.

I'm sure Mark Smith would be better placed than I to address this.

All the best to everyone!

by Mark Smith (Barrister-At-Law)

16:04 PM, 22nd January 2015, About 7 years ago

Reply to the comment left by "Incensed Landlord" at "22/01/2015 - 15:59":

There is no requirement for the WB to get consent for the sort of securitisation they undertook.

by Mark Alexander

16:47 PM, 22nd January 2015, About 7 years ago

Another article just published in my local regional Newspaper >>> http://www.edp24.co.uk/news/norfolk_man_is_part_of_group_taking_building_society_to_high_court_over_mortgage_rate_hikes_1_3926545

I wrote the following response comment but couldn't work out how to post it .....


Please allow me to introduce myself …

My name is Mark Alexander and I am the person referred to in this article. I actually live in Shipdham which is between Dereham and Watton. I am a retired finance broker.

The special conditions in my OFFER OF LOAN state (capitalisation for emphasis) ….

“After 30th June 2010 your loan reverts to a variable rate which is the same as the Bank of England Base Rate, currently 5%, with a premium of 1.99% UNTIL THE TERM END.”

NOTE the words “until the term end”, which I have always understood meant that the premium of 1.99% over the Bank of England Base Rate would apply to the remainder of my 25 year mortgage after the initial 4 year fixed rate period was completed.

The Special Conditions which the mortgage company are relying upon to vary the premium are generic to all of their mortgage products. In one section of the Special Conditions it even says the property cannot be let which is also inconsistent with a Buy To Let Mortgage! Clearly the mortgage company needed the contractual ability to vary their Standard Variable Mortgage rates which are not pegged to another rate in the same way as a tracker, hence I had no reason to assume that the clause allowing them to make variations to interest rates would affect me.

To deal with issues of inconsistency between the OFFER OF LOAN and the Special Conditions Booklet the mortgage company also has the following condition in the very same Standard Conditions booklet it is using to justify the increase in the premium charged ….

These Mortgage Conditions incorporate any terms contained in the OFFER OF LOAN. If there are any INCONSISTENCIES between the terms in the Mortgage Conditions and those contained in the OFFER BOF LOAN then THE TERMS CONTAINED IN THE OFFER OF LOAN WILL PREVAIL.

The reason that I took the lead and encouraged nearly 400 more affected borrowers to fund this expensive legal battle is that the industry regulators have a proven track record of allowing bank and building societies to get away with this “daylight robbery”. In 2013 the Bank of Ireland hiked its rates for over 14,000 customers with Tracker Mortgages and many of them were home-owners, NOT Landlords. The regulators proved ineffective. Prior to that the Skipton Building Society CEO said in 2009 that their Standard Variable Rate mortgages were capped at 3% over the Bank of England base rate and that pledge would be honoured. A year later those promises were broken and the regulators did nothing then either!

There are over 1 million Tracker Rate mortgages in the UK, they were very popular in the decade prior to the Credit Crunch. I have other tracker mortgages with other Buy to Let lenders and I am fearful that if they follow suit I will be bankrupt and all my hard work to generate money to invest for my retirement will be undone. Many homeowners with tracker rate mortgages could lose their homes.

I simply couldn’t allow this to continue, somebody had to stand up to the financial bullies and I am proud to be one of them, whatever the outcome.

The worst case scenario I suppose is that if I lose my case it will speed the rate hike process which was clearly inevitable. If I win then I’d like to think I’ve saved the livelihoods over a million homeowners and people fortunate to have been able to invest into much needed quality rental property.

I also worry about the impact on tenants if my case is unsuccessful. The ramification of all lenders being able to hike up Tracker Mortgage interest rates on a whim will no doubt result if mass repossessions of the quality rental property which has been funded by Buy To Let mortgage lenders. The knock on effects to tenants in terms of security of tenure and the availability of quality accommodation could be devastating!

by Incensed Landlord

16:48 PM, 22nd January 2015, About 7 years ago

Reply to the comment left by "Mark Smith (Barrister-At-Law)" at "22/01/2015 - 16:04":

Thank you for clearing that up, Mark. A shame, as we'd then have been in an even stronger position.

Let's hope that nevertheless we'll triumph. It'll be such a huge travesty of justice if this avaricious lender is allowed to get away with this. My faith in pretty well anything 'legal' will then be at an all-time low, if that was to be the case. However, on a more optimistic note, I've every confidence that we shall win, and it'll be all over the media at large, again reminding people how large organisations cannot just ride roughshod over people like this without serious opposition and legal challenges. They'll think twice in future (I hope!)

Thanks again.

by Richard Kent

17:32 PM, 22nd January 2015, About 7 years ago

You guys could possibly help your case more by writing a kind but personal letter of plight to Paul Doerr, the Clerk of Justice Teare here:


You could emphasise the human aspect of this hike and the impact it has had on your lives.

It could sway the decision in your favour.

by Seething Landlord

18:46 PM, 22nd January 2015, About 7 years ago

Reply to the comment left by "Richard Kent " at "22/01/2015 - 17:32":

For goodness sake do no such thing.

by Mark Alexander

18:48 PM, 22nd January 2015, About 7 years ago

Reply to the comment left by "Richard Kent " at "22/01/2015 - 17:32":

I'd like to think that all affected borrowers will seek advice from Mark Smith before doing anything of this nature. After all, it is Mark Smith that we chose to pay to advise us on legal strategies.

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