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Landmark court ruling comes down in favour of buy to let investors

A landmark court ruling against the West Bromwich building society has come down in favour of buy to let investors. 

The case centres on mortgages issued up to 2008 to around 6,500 investors and landlords with three or more properties. 

The mortgages contained a clause allowing the lender, under certain circumstances, to change the agreed interest rate - even though the landlords who took out the mortgages believed they would be ‘tracking’ the Bank of England's base rate.


Base rate has been just 0.5 per cent since March 2009 but the West Bromwich pushed up the rates on its buy to let mortgage product by two percentage points in 2013, to any borrower who had three or more BTL properties. Some landlords found their monthly payments doubled as a result.

The Financial Ombudsman, when the issue was referred, found in favour of the building society but now a court has ruled in favour of a class action brought by around 400 landlords.

The case was led by the property118 website; yesterday’s decision by the Court of Appeal was in favour of landlords who were appealing against an earlier judgement - in favour of the West Bromwich - by the commercial division of the High Court. 

Some 6,250 landlords are now expected to receive a refund which the building society says will cost about £27.5m.

  • Don Holmes

  • Don Holmes

    Congratulations to all concerned, especially property 118. This judgement may now encourage more landlords to get behind the other class action being lead by Mr Bolton of PP and 118 against what has become known as " The Alice in wonderland Tax" the loss of interest relief on buy to let mortgages. Check out Property 118.com for more info. Great news!

  • Peter Hendry

    The other class action may not be quite so easy to win as it involves already wealthy landlords becoming more wealthy yet, at the expense of people forced into having to rent roofs over their heads?

  • Mike Walker

    Regardless of socio political views Peter, if it's proved wrong in the courts, then its wrong.

  • Peter Hendry

    The courts will take into account both the existing law and 'equity' when deciding each new case.


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