The RLA has written to Richie Boucher, the Bank of Ireland’s chief executive, to express its concern at the bank’s “hefty hike” of its UK tracker rate.
The Bank of Ireland recently wrote to its buy-to-let mortgage customers, informing them that the tracker rate on their mortgages would increase to 4.49 per cent above the Bank of England base rate with effect from May.
In his letter to Mr. Boucher, Alan Ward (above), chairman of the RLA, wrote, “We have been contacted by members who are going to be hit hard by your decision to implement this above-inflation and disproportionate increase. All those members who have contacted us believe that it makes a mockery of the whole concept of a ‘tracker rate’.”
Alan continued, “We are extremely disturbed that conscientious landlords, who are customers of the Bank of Ireland and your division Bristol & West, will find the sharp increase unfeasible – leading to the increased potential for defaults and repossessions.
“Many of the landlords affected will have had hitherto excellent credit ratings; and, whilst we are more than aware that interest rates go up as well as down, this hefty hike in the tracker rate will effectively leave them financially high and dry.”
Alan also raised the issue of tenants facing homelessness because of the bank’s actions, “What will be the fate of tenants caught up in the circumstances caused by repossessions?”
With the private rented sector the only area of housing currently growing, Alan questioned the Bank of Ireland’s lack of ambition to support this burgeoning sector, and wrote, “We are concerned that the Bank of Ireland does not recognise the potential of the private rented sector; and, instead of pursuing short-term targets, should consider the long-term benefits of encouraging a growing sector of the housing industry.”
Alan concluded, by urging Mr. Boucher, to “reconsider” the bank’s decision, welcoming an “opportunity to discuss this matter with you in person at a mutually convenient time.”