West Brom wins mortgage case ruling in which million people potentially affected

Retired mortgage broker Mark Alexander has complained be was unfairly asked to pay more for a buy-to-let mortgage.

He says the company, which is linked to the West Bromwich Building Society, classed him as an investor not a consumer.

Mr Justice Teare at the High Court yesterday ruled in favour of the West Bromwich on the issue.

The society said in a statement after the hearing: "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."

Mr Alexander, aged 47, of Shipdham, Norfolk, who had complained about the way the interest rate had been varied, is now aiming to ask the Court of Appeal to consider the case.

The West Bromwich had said customers with three or more buy-to-let properties were not "regarded as consumers" and disputed Mr Alexander's claim, arguing that the terms of an offer were fair.

About 400 other people who had identical mortgages with the West Bromwich had joined Mr Alexander in his High Court fight.

Lawyer Mark Smith, who represented Mr Alexander, estimated that around 15,000 West Bromwich customers could be affected. And he said as many as a million people in total could be affected throughout the UK.

"This is bad news for a lot of people," said Mr Smith, after the hearing. "And it is good news for a lot of financial institutions."

He added: "We are considering an appeal."

Mr Smith, a barrister who works for Cotswold Barristers - which is based in Cheltenham, had told Mr Justice Teare: "(The case) is going to be a matter of interest to a large number of financial institutions as well as their customers."

The judge, who had analysed argument at a trial in London earlier this month, said he had been asked to consider whether the construction of a mortgage agreement was consistent with the terms of an offer.

He was told that the total costs of the case could be more than £450,000.

Mr Alexander - and his supporters - said they had had run up lawyers' bills of around £100,000.

The West Bromwich said its costs were about £370,000.

Mr Justice Teare said Mr Alexander - and his supporters - had lost and would have to foot all legal bills.

But he said the costs would need to be analysed and assessed and added: "I would be very surprised if anything like the figure of £370,000 ... could be justified as reasonable or proportionate."