A West Norfolk property broker has lost his High Court battle with a mortgage lender over its decision to raise his, and hundreds of other customers’, tracker rates.
However, the lawyer acting for Mark Alexander, who lives near Lynn, has said they may fight on, despite being faced with legal bills running into hundreds of thousands of pounds.
Mr Alexander, 47, was one of hundreds of West Bromwich customers who brought the action over the building society’s decision to increase their rates by two per cent in December 2013.
They argued that breached the terms of their contracts, which stated that their interest rate would track the Bank of England base rate, which remains at a record low of 0.5 per cent.
But their case was rejected by Mr Justice Teare in a ruling delivered on Thursday.
The company had previously claimed that the “personalized” terms offered to the custtomers were trumped by their standard mortgage offer conditions which at that time, they claim, granted them the right to vary a tracker rate should they feel it necessary to do so, as if it were a standard variable rate.
They also argued that customers with three or more buy-to-let properties, such as Mr Alexander, were not “regarded as consumers”, but as investors.
The mortgage at the centre of Mr Alexander’s case relates to a buy-to-let property which he bought with the firm’s backing in the summer of 2008.
The dispute has been seen as an important test case which could have far-reaching implications for the housing sector.
And Mr Alexander’s lawyer, Mark Smith, believes as many as one million homeowners across the country, including up to 15,000 other West Bromwich customers, could be affected by the judge’s decision.
He said after the hearing: “This is bad news for a lot of people and it is good news for a lot of financial institutions.”
He added: “We are considering an appeal.”
Mr Alexander - and his supporters - said they had had run up lawyers’ bills of around £100,000, while the West Bromwich said its costs were about £370,000.
The judge said Mr Alexander and his backers would have to meet the costs of the action following his ruling.
But he added that he would be “very surprised” if the figure given by the company could be shown to be proportionate.