West Bromwich Building Society Tracker Margins Legal Action

IMPORTANT ANNOUNCEMENT

For those of you who have not been following the related BoI thread please see my latest post in response to comments left by Paul Brindley.

This could be a major breakthrough for us.

See >>> http://www.property118.com/bank-of-ireland-increase-differential/37002/comment-page-97/#comment-31645
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Interesting letter through the post today!
Further to previous correspondence, I received a letter today from WBBS stating that they will in fact no longer be increasing their interest rate by 2% but that due to improved market conditions they will increase it by 1.9% instead!
Has anyone else received such a letter?

Reply to the comment left by "Incensed Landlord" at "13/11/2013 - 17:19":

I can't argue with you that Landords receive a bad reputation but I feel that your rant against the press is rather naive.

The UK has traditionally been a nation of home owners, and yet that dream is becoming more unattainable as each year goes by for thousands if not million of potential home owners because of the failure of respective governments to engage on a mass home building program.

It's is only inevitable that someone trying to get onto the property ladder will have some degree of resentment to the thousand of landlords who have built up multiple property portifolios on the back of cheap leveraged credit. You talk about the risk that you take on board, which is correct but don't forget it is also the banks money which is at stake, and in many cases the funds invested in building societies by inidividuals striving to save for a deposit who have seen their interest returns slashed during this current economic cycle. It's been very interesting reading this thread, as whilst I agree it can't be right that the terms of a contract can seem to have been changed, you only have to look at all the depositors who have had their interest rates slashed. Something has to give.

There are always two sides to the argument....you will argue that you provide an invaluable service to tenants by taking on risk....whilst a tenant will argue landords are handed a massive tax advantage via the ability to offset interest payments against profits whilst at the time only staking a margin of their own money on a property, which for an asset class, that generally only heads in one direction short term, is not in fact that much of a risk.

Reply to the comment left by "Matthew " at "14/11/2013 - 11:17":

Wow, do they really think 0.1% will stop this Action ?

On the question of the 'alleged credit search' conducted by them in our case it must have been a fairly recent search as in their letter it states the amount of mortgages that we currently have. This is a different number that when we took the mortages out with the WBBS in 2007 so they cant have used the info supplied at the time.Also I have been a member of Experian for nearly 10 years and nothing has shown on the profile or alerts recently so god knows how they got the info on us ?

PS - for those that have the info back on the Subject Access Request was there any reference to any searches within that

Reply to the comment left by "James Tallis" at "14/11/2013 - 11:20":

If you had a fixed interest rate bond for a term would you like your interest rate to be reduced ?

The banks money is not at stake unless they do not take the required steps at the outset. If they didn't do that it was down to greed .Landlords will need to make up any differences if the property is sold at a loss. That could mean losing your house . That's a major risk.

Not a landlords fault because of a failure in Government policy.

What will happen to those individuals who strive to get on the property ladder, take on a tracker and then have the rate changed because the bank or building society want to ?

Putting money into a bank is also a risk but its easy work too.

Why would you not be able to offset interest payments or any other related expense off against income. That's all set out in the tax law of this country . Without that the risk would be higher , less people would do it , more people would not be able to leave home, work outside the family residence area, generally move around the country as and when they wished.

I think you mean an asset class that goes one way long term ?

When it does go up landlords have to pay Capital Gain Tax too. While making profits on rents they pay Income tax.

Everyone starts off with pretty much the same opportunities in this Country. Ok a few are more privileged and others get dealt a pretty crap hand, but on the whole we all get an education and opportunity. Some play safe some take risks.

If you think its easy and relatively risk free , give being a landlord a crack. Try running a job or your own business at the same time. Work nights and weekends. Be on call 24/7 for some unbelievable reasons , excuses. Come with me and visit some of the properties I have . See how they look when I pass them over to tenants and listen to how much they would like this doing an that doing. How its not quite perfect here and there. Listen how much they are going to look after it , what improvements they are going to do etc etc. Then come back with me a few years later. Come into places that when you leave your first thought is to get a bath or shower !

Pass a flat to someone with a two year old kitchen and bathroom in . New carpets , all redecorated. New appliances etc. Go back 30 months later when the tenant has done a runner. Spend £5000 renewing everything because the kitchen is falling apart, the toilet has never been cleaned ( have you ever seen a toilet that has never been cleaned for two and a half years) although it was emulsioned !!

Flooring that stuck to your feet! Wiring ripped out of economy 7 heaters for no reason. Controls ripped off. Cigarette burns on every surface !

The bank by the way are not going to put anything towards these costs . I am paying it all. The bank manager as not spent the last 5 weeks evenings and weekends sorting this. He doesn't even know. So James, its not without risks or rewards. But mostly its not without a lot of hard work and worry. Its full time, doesn't go away when you are on holiday . Its hard work very hard work. But hopefully one day it will all be worth it, because I will not rely on anyone else for mine or my families long term wellbeing.

We signed agreements and we want to stick to those agreements . we are not bellyaching cos its not fair . Its because its not right. We wont be able to pass this cost onto our tenants, its our problem, but its a problem that we should not have to deal with at the moment.

There are two sides to this story , the right side and West Broms greedy side .Another risk we are taking, one that no one could really foresee.

So until you have had some time at being a landlord and walked in our shoes don't tell us "is not in fact that much of a risk".

PS The offer to come with me is always open . It will open your eyes to what SOME tenants can be like and the risks, financial and to our personal security and health entails.

Thanks

Dean

Reply to the comment left by "James Tallis" at "14/11/2013 - 11:20":

PPS

Have you ever picked up your answer phone message to hear someone threaten you with being stabbed and not to return to the area you own a property in because you didn't let them rent a property from you ?

How would you like to walk in that area on your own at night and take that risk ?!

Rant over

Reply to the comment left by "Matthew " at "14/11/2013 - 11:17":

Hi Matthew,
Yes, this morning's post arrived just as I was reading your comment - with two letters from West Bromwich for each of our mortgages - they are now only dropping them to 1.9% - wow what a huge difference! Wonder what they are up to here....

Reply to the comment left by "Dean Turner" at "14/11/2013 - 12:26":

Dean,

Sounds like hard work indeed. I think you have slightly misunderstood the tone of my post though. You will see from my original post that I agree its unfair that terms of contracts seem to have been changed.

My main point its that I believe its naive to blame the press for all the bad publicity that landlords receive. Being a landord will never be a popular profession. Those without will always envy those with. And I agree, just as in any business, interest payments are and should be an allowable expense. Is it fair though, that private individuals investing in their own homes to not have that same advantage. It once used to exist in the form of MIRAS relief.

I don't want to distract from the purpose of this tread which is to fight your cause...but just felt like i had to respond to 'Incensed' post.

Letter arrived from HM Treasury in reply to the one I sent over a month ago to George Osborne.

Basically says they don't intervene in these decisions and the pricing of loans remain commercial decisions for lenders etc etc which has completely missed the point - Its the contract entered into that has been changed!

Also says they set the legal framework for the regulation of financial services but have no investigative or prosecuting powers. So when all our MP's have written to the Treasury are they going to get the same response ?