West Brom BS case arrives in court

The West Bromwich Building Society BTL mortgage case arrived in the High Court yesterday.

Lead by Mark Alexander, as part of a Property 118 action group, the action follows West Bromwich Building Society's decision to raise its agreed end of mortgage term tracker rates. A rise that affected 6200 landlords.

The building society justified the doubling of a specified 1.99 per cent rate to 3.99 per cent by referencing small print in the BTL mortgage contract that stipulated unfixed mortgage rates ‘may be varied by (us) at any time’.

The landlords legal representative, Mark Smith, warned that if West Brom BS won the case, it could allow them to do the same to residential mortgages and that other lenders could be encouraged to follow suit.

The West Brom's defence, Raymond Cox QC, defended his client actions by saying the right to vary the interest rate ‘was repeatedly made clear in the documents sent to Mr Alexander’and that the
Financial Ombudsman Service (FOS) had disregarded all complaints made to them regarding the rise. 

The case could form a legal precedent that could effect millions of mortgages across the country. 

If the West Bromwich Building Society are able to justify their actions, other lenders of both BTL and residential mortgages could look to raise rates, the potential of which was recognised by the defences Mr Cox,  saying -

‘If we win our case then, going forward, if people have tracker mortgages under the same terms, then other mortgage providers could do the same as us.’

The hearing continues.

The case can be followed on twitter using  #WestBromTracker

The Daily Mail has covered the West Brom Case

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