Brokers have slammed West Bromwich Building Society after it told 6,700 of its buy-to-let tracker customers their interest rates would be hiked by 2 per cent on 1 December.
The affected borrowers, who are all customers of West Brom’s now closed specialist lending subsidiary West Bromwich Mortgage Company, are on a variety of different rates but all will see their interest rates increase by 2 per cent.
West Brom blamed “market conditions” for the increase and said the change is allowed as part of the mortgage contract.
A spokesman for the building society says: “These changes, which are permitted under the terms and conditions of the accounts, are a reflection of market conditions and the need for us to carry out our business prudently, efficiently and competitively.”
West Brom’s move follows that of Bank of Ireland, which on 1 May more than doubled its tracker mortgage rate for 13,500 borrowers.
However, in late May Bank of Ireland reversed its hike for 1,000 flexible accounts customers and 200 more who had switched to a tracker mortgage.
Coreco director Andrew Montlake says: “This move by West Brom does nothing to improve the trustworthiness of lenders and shows that lenders have the power to do what they want, when they want, often at the expense of their customers’ best interests.”
Trinity Financial product and communications manager Aaron Strutt says: “It does not help consumers’ trust in banks and building societies. If you are sitting on a long-term tracker rate and you can fix in then it is potentially worth the risk, especially if you are with one of the smaller lenders, which could be more at risk of doing this sort of thing.
“I am not sure I would be applying to the West Brom for a mortgage after this move.”