A few weeks ago we published a post discussing how a group of landlords had been given the go-ahead by a barrister for them to launch a class action against the Bank of Ireland. The landlords are taking the bank to court due to the fact that it has announced it will be increasing the interest rates on its tracker mortgages by around double. Even though not all that are affected by the bank’s decision are landlords, those with buy to let mortgages have been hit the worse, as interest rates that were just 1.75 per cent above the base rate will now increase to a massive 4.49 per cent.
Technically, the Bank of Ireland is allowed to increase the interest rate on its tracker mortgages; however its customers have claimed that the bank is abusing its power and that the amount they are increasing the interest rates by is unfair. Around 250 landlords have therefore teamed together to take action against the bank, and so far they have been supported by barristers. In a letter written earlier this month, a barrister said that for this case they are planning on separating the landlords in the group into two sections: amateur and professional.
Those that are considered ‘amateur’ landlords will generally only own one or two properties and will have other forms of income, and will be advised to take their case to the Office of Fair Trading. Meanwhile, ‘professional’ landlords who let out properties as their main occupation will be given a number of options including suing for damages. Discussing the case, owner of Property118.com, Mark Alexander, said: “The barrister did not put a percentage on it when rating our chances of success but his report was very positive. We are very confident because there is plenty of case law, particularly for consumers, comparable to this action.”
A spokeswoman from the Bank of Ireland also commented on the case, and said: “Should a customer decide to take legal advice in relation to this increase they are entitled to do so and the Bank will deal with any legal proceedings through the proper legal channels.” Landlords who have been affected by the Bank of Ireland interest rate increases and wish to take part in the class action should contact their landlord insurance provider in order to discuss with them the legal implications and whether they can help cover any of the court costs.