Following a recent court ruling, which saw West Bromwich Building Society forced to refund over £27 million to Buy to Let investors, two other mortgage lenders are now facing legal action.
Buy to let investors who have mortgages with Skipton Building Society and Bank of Ireland are set to mount a legal challenge, which if successful, could see large refunds, similar to those paid to customers of the West Bromwich Building Society.
The action by investors follows he decision of both Skipton Building Society and Bank of Ireland to increase interest rates on the tracker mortgages of some Buy to Let investors, despite the Bank of England leaving rates unchanged for nearly a decade.
The legal action is being taken by Property 118 Action Group, which is planning to raise £100,000 to meet the costs.
Lender reaction
Property 118 founder Mark Alexander said that legal action against the two lenders will start in August, with the issuing of pre-action protocol letters, which is the first step necessary in a civil claim.
Despite the ruling against West Bromwich Building Society it appears the two mortgage lenders currently in the sights of Buy to Let investors will fight the action.
A spokesperson for Skipton Building Society said: “Skipton remains firmly of the opinion that, under the terms and conditions of its mortgage offer, it lawfully had the right to remove the standard variable rate ceiling that applied until 1 March 2010.”
“The recent decision of the Court of Appeal in the Alexander v West Bromwich Mortgage Company Ltd case was very fact specific regarding an inconsistency in mortgage documentation. No such inconsistency can exist with Skipton’s documentation because the relevant key terms were very clearly and fairly laid out in only one document, being the mortgage offer.”
Whilst a spokesperson for Bank of Ireland said: “The West Bromwich case is not comparable to Bank of Ireland UK. Bank of Ireland’s offer document and mortgage terms and conditions expressly stipulated that the tracking margin or differential could be varied, and the offer and mortgage conditions documents are consistent, allowing for the differential to be lawfully changed.”
