How far will house prices fall [volume 4]

[IroningMan]

jdw1234 said:

Well that went well...

http://www.property118.com/westbromtracker-today-j...

Now they are going to find out that they can't just pass the cost on to their tenants.

As someone with a tracker mortgage I find that case very disturbing.

Doesn't it also sever any remaining link between BoE interest rates and consumer spending power?

[jdw1234]

IroningMan said:

jdw1234 said:

Well that went well...

http://www.property118.com/westbromtracker-today-j...

Now they are going to find out that they can't just pass the cost on to their tenants.

As someone with a tracker mortgage I find that case very disturbing.

Doesn't it also sever any remaining link between BoE interest rates and consumer spending power?

It doesn't relate to personal mortgages rather pro landlords.

I don't get your second point.

[hornetrider]

I hope you all donated your £50.

[XJ40]

jdw1234 said:

Well that went well...

http://www.property118.com/westbromtracker-today-j...

Now they are going to find out that they can't just pass the cost on to their tenants.

That's crazy, it seems to effectively render a tracker pretty meaingless doesn't it, I doubt that's the last of it.

[IroningMan]

jdw1234 said:

It doesn't relate to personal mortgages rather pro landlords.

I don't get your second point.

I don't see the differentiation between BTL and personal. Perhaps it's in the judgement, but those commenting and closely involved don't seem to see it, either.

[Brite spark]

IroningMan said:

I don't see the differentiation between BTL and personal. Perhaps it's in the judgement, but those commenting and closely involved don't seem to see it, either.

Btl mortgages aren't regulated, consumer mortgages are. The argument here is that these landlords have multiple properties and therefore are professional investors, well should be.
I agree it doesn't make sense from a laymans point of view though, to most the tracker should have been a tracker unless there was precise wording in the contract to allow the differential to be increased from the agreed rate.

This isn't the first mortgage company to raise rates in this way, several others already have and the ombudsman has agreed the west brom rate hike legal.

Edited by Brite spark on Thursday 29th January 15:12

[walm]

Brite spark said:

I agree it doesn't make sense from a laymans point of view though, to most the tracker should have been a tracker unless there was precise wording in the contract to allow the differential to be increased from the agreed rate.

It's an absolute travesty.
It is a simple question of contract law - nothing to do with the ombudsman or regulation.

Either the contract was "fixed spread for term" or "not fixed spread for term".
It looks like the judge decided the standard terms ("we can adjust the rate") over-ruled the specific product offer terms.

Which doesn't sound like cricket to me.

[Sheepshanks]

walm said:

Which doesn't sound like cricket to me.

Nor me. Or the Barrister either, apparently. Judge's decisions can seem bizarre at times.

A colleague has 0.18% above base with Woolwich (Barclays) and I was quite surprised they let him port it to a new property a few months ago.

[Jimmyarm]

I don't see what the issue is, the contract says they can adjust the rate and they did, tough tits.

Obviously the business owners that took out these commercial loans had their solicitors check the contracts out before they signed up...

It amazes me that people assume btl is just an easy way to make money/invest and not that it is in effect running a small business and comes with the pitfalls (and benefits) of doing so.

[Sheepshanks]

Jimmyarm said:

I don't see what the issue is, the contract says they can adjust the rate and they did, tough tits.

...but the contract also says that terms on the offer letter will prevail, and the offer letter says the margin is fixed for the whole term.

[Burwood]

i hope they appeal. It's the wrong decision in my view. Wish them luck

[Jimmyarm]

Sheepshanks said:

...but the contract also says that terms on the offer letter will prevail, and the offer letter says the margin is fixed for the whole term.

If it was a retail consumer contract I would agree that it was 'unfair' but, it isnt. They are commercial and need to be treated as such.

The person entering into the contract shouldn't be considered a layman, they should know to take advice.

Unfortunatley most people don't seem to understand this.

[Croutons]

Jimmyarm said:

If it was a retail consumer contract I would agree that it was 'unfair' but, it isnt. They are commercial and need to be treated as such.

The person entering into the contract shouldn't be considered a layman, they should know to take advice.

Unfortunatley most people don't seem to understand this.

I think you need to read the whole of the story, any reading of the terms, layman or pro, would indicate the tracker signed up to was a tracker, with specific terms that over rode the general. But for some reason the general were invoked over the specifics, and the judge has said that's ok. That makes a mockery of the whole thing, regardless of the end user's status.

[Sheepshanks]

Jimmyarm said:

If it was a retail consumer contract I would agree that it was 'unfair' but, it isnt. They are commercial and need to be treated as such.

It's got nothing to do with being "unfair", the contract states the offer will prevail and the offer says the margin is fixed.

It's hard to imagine how it could be more black and white. The Judge's decision seems perverse.

[jdw1234]

The same ruling has been made several time now with different lenders.

It has also been confirmed the lenders are within their rights to call the entire mortgage with 30 days notice.

[Jimmyarm]

Sheepshanks said:

It's got nothing to do with being "unfair", the contract states the offer will prevail and the offer says the margin is fixed.

It's hard to imagine how it could be more black and white. The Judge's decision seems perverse.

The contract also says that they can vary the rate.

A harsh lesson perhaps but, it is a commercial contract not a retail one.

The judge is perfectly correct.

If you can't understand that these loans are taken out by businesses that's sole intention is to make a profit for the owner of such businesses then you will never see why the judge made this decision.

These btl mortgages are not a normal consumer !mortgage and shouldn't be treated as such by anyone, I am happy that the court is seeing this.

[sugerbear]

A

jdw1234 said:

The same ruling has been made several time now with different lenders.

It has also been confirmed the lenders are within their rights to call the entire mortgage with 30 days notice.

That is the thing, even if they win on the fixed rate argument the building society are within their rights to call in the debt within 30 days. Either way they lose. A lender being able to call in a commercial debt with a notice period is quite normal.

They (the landlords) are throwing good money after bad and there is no positive outcome for the if they win or lose.

[Sheepshanks]

Jimmyarm said:

The contract also says that they can vary the rate.

The contract also states that in there are inconsistencies between the contract and the offer then the offer will prevail. The offer says the margin is fixed for term.

[Jimmyarm]

Sheepshanks said:

The contract also states that in there are inconsistencies between the contract and the offer then the offer will prevail. The offer says the margin is fixed for term.

It makes no difference at the end of the day, as a court has decided(for now)2

Like I have said three times, it is a!commercial contract and the business owner that took it out should have doe their due diligence and had it checked out.

How much will it take for all these Btl people tocrrealise that it isn't just an easy cash generator ?

[Sheepshanks]

Jimmyarm said:

Like I have said three times, it is a!commercial contract and the business owner that took it out should have doe their due diligence and had it checked out.

Which part of 'the premium is fixed until the term end and terms in the offer prevail' are you struggling with?

Jimmyarm said:

How much will it take for all these Btl people tocrrealise that it isn't just an easy cash generator ?

They've gone after a group of people in the first place (those with more than 3 BTL mortgages) that there's likely to be little sympathy for. But they admitted it could affect ordinary homebuyers too.

Edited by Sheepshanks on Thursday 29th January 23:50