David Morris, MP for Morecambe and Lunesdale, has tabled a motion to put before the House of Commons tomorrow (Thursday 23 January), citing evidence relating to the West Bromwich Building Society, which last year put up its lifetime buy-to-let tracker rates by 2 per cent and sent letters to investors saying it had the right to recall the loans ‘at any time’.
Speaking to Financial Adviser, Mr Morris said: “I am extremely concerned about the fact that mortgage lenders are increasing the margin they make on tracker mortgages.
“This practice is damaging to the economy, immoral and may even be illegal. The FCA must investigate this urgently.”
The call to action came a day after he and other MPs met with Property118, the campaign group set up by Mark Alexander to highlight the thousands of people who have faced significant increases on their mortgages.
The campaign group, which has instructed lawyer Justin Selig to investigate the legality of the hikes, has claimed the mortgage policyholders had not been aware at point of purchase that a lifetime tracker rate could, or would, rise.
In many of the terms of the mortgage offer letters, there was no mention of this, Mr Alexander has claimed, and it would not have been clear to any save the solicitors who oversaw the property purchase.
Last year, Financial Adviser revealed that some of the mortgage policy holders at risk are pensioners who hoped to use the income from their two or three rental properties to boost their income in retirement.
The Bank of Ireland has also come under scrutiny over the same issue, and MPs and campaigners alike are worried this may herald the start of more rate rises on products that the buyer thought would remain static for the life of the mortgage.
Mr Alexander said: “More than 20 MPs have now expressed concerns and support for their constituents affected by the actions of West Bromwich Building Society and the Bank of Ireland.”
