The West Brom Building Society has won its High Court battle against a group of landlords over a tracker rate hike.
A High Court judge today ruled in favour of the building society after it increased its buy-to-let tracker rate by 2 per cent.
In September 2013, West Brom told 6,700 of its buy-to-let tracker customers their rates will increase by 2 per cent on 1 December.
The borrowers all have mortgages with West Bromwich Mortgage Company, its now closed specialist lending arm, and own multiple properties.
A class action attracted more than 400 individuals who argued the decision breached their contractual rights. They each paid £1,144 raising more than £500,000.
A West Brom spokesman says: “We have always maintained that we acted entirely within the terms and conditions of these buy-to-let mortgages and the court’s ruling wholly justifies our position. The increase was made to reflect changing market conditions and the need for us to carry out our business prudently, efficiently and competitively and in the best interests of our members.
“We have approached this in a fair manner, passing on any improvements in market conditions by reducing the additional percentage borrowers have to pay.”
The spokesman says that since the rate hike was announced, it has reduced from 2 per cent to 1.5 per cent, due to “improved market conditions”.
Property118.com owner Mark Alexander, who lead the action, says the landlords plan to appeal the decision.