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Landlords to begin legal proceedings against West Brom

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06/12/2013
Landlords contesting West Bromwich Building Society
Landlords to begin legal proceedings against West Brom

A barrister has given the group the go-ahead to begin a representative action. The landlords argue the West Brom has no legal grounds to increase their tracker rate margins.

Property 118 founder Mark Alexander, who is organising the action, said enough money had been raised to fund the proceedings and the barrister believed the landlords have a strong case: “He reckons a good judge will be able to make a decision on this within an hour.”

He urged brokers to check their records and engage with affected clients: “Brokers are already caught up in this case.”

In a separate case, landlords are contesting the Bank of Ireland rate rise. 

According to Property 118, mortgages sold through brokers have been disproportionately affected by the rate rise.

However, a West Brom spokesman said: “The buy to let mortgages affected have not been selected on the basis that they were introduced by brokers. The reason for their inclusion in the rate change activity is because the borrowers are landlords of multiple property portfolios and the channel via which the mortgages were sold has no bearing.”

In relation to the court case, he added: “Changes are being made in line with the accounts’ terms and conditions, which were designed to ensure we could fulfil our duty to manage our business prudently in all market conditions. We had this validated externally before introducing the change.”

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